Bangladesh Government Strategic Playbook: Responding to U.S. Reciprocal Tariffs With a Resilience and Partnership Agenda
2025-04-04
Purpose of This Playbook
This strategic playbook is designed to help the Government of Bangladesh navigate the new reciprocal tariff regime proposed by the United States. It outlines a series of actionable, bilateral, and strategic initiatives to safeguard export resilience, deepen economic ties with the U.S., and align with national interests over the next 36 months.
Executive Summary
The recent U.S. move to impose 37% tariffs under the “reciprocal tariffs” policy poses a critical threat to Bangladesh’s economy—especially our $7B+ RMG export sector. With the U.S. being our largest single export market, the Government must act swiftly and strategically to mitigate this risk while seizing opportunities to strengthen bilateral ties.
To mitigate these risks, Bangladesh must adopt a proactive, strategic response. Key recommendations include:
Diversify Agricultural Imports: Expand procurement of U.S. cotton, wheat, and other staples to strengthen goodwill and align with U.S. domestic interests.
Secure Energy Partnerships: Pursue long-term LNG agreements with U.S. suppliers to deepen strategic and economic interdependence.
Attract U.S. Investment: Open infrastructure and energy sectors to U.S. equity; establish a co-managed Sovereign Wealth Fund to anchor long-term collaboration.
Strengthen RMG Competitiveness: Shift toward high-value apparel segments and enhance sustainability to maintain U.S. market access.
Broaden Trade Diplomacy: Leverage TICFA to negotiate tariff relief and explore a future Free Trade Agreement (FTA).
Failure to act decisively risks eroding Bangladesh’s competitive edge in the U.S. market, while a strategic alignment with U.S. interests could safeguard exports and foster long-term economic collaboration
Bangladesh’s Current Import Composition from the U.S.
Understanding Our Leverage: What We Already Import from the United States:
Figure: U.S. Exports to Bangladesh (2024) – Totaling $2.21B. Top exports: Scrap Iron, Cotton, Soybeans, and Petroleum Gas.
This baseline provides a unique opportunity: our biggest imports from the U.S. align directly with sectors politically and economically strategic for the Trump administration—rural agriculture and energy exports.
To frame Bangladesh’s strategic response, it is important to ground our position in current data. The United States exported approximately $2.21B worth of goods to Bangladesh in 2024, with Scrap Iron (26.1%), Raw Cotton (15.4%), and Soybeans (14.7%) comprising over half of total U.S. exports. Petroleum Gas (14.8%) also remains a key component, highlighting existing interdependence in both agriculture and energy sectors.
Strategic Implication: These existing trade flows can be leveraged as bargaining chips in our tariff negotiation strategy. Increasing volume in these categories directly supports U.S. export priorities and reduces their trade deficit, reinforcing our commitment to reciprocity.
Boost U.S. Agricultural Imports (Soy, Wheat, Cotton)
High
Moderate – Reallocation of import tenders; FX impact manageable
High – Reduces U.S. trade deficit; appeals to U.S. agri lobby & Trump’s rural base
2
Sign Long-Term U.S. LNG Deals
High
High – $10–15B over 20 years; infrastructure build-out needed
Very High – Energy interdependence; aligns with U.S. “Energy Dominance” agenda
3
Offer Equity to U.S. Firms in Infrastructure/Energy
Moderate to High
Low to Moderate – Depends on tax policy changes, governance frameworks
High – Creates U.S. investor constituency to oppose tariffs on BD
4
Partner with U.S. Mutual Funds and Financial Institutions on Bangladesh Sovereign Wealth Fund
Moderate
Moderate to High – $2–5B initial capital; institutional capacity build-out
Moderate – Builds long-term U.S. financial integration; indirect impact on trade talks
5
Facilitate U.S. Private Equity Access to Healthcare
High
Low to Moderate – No policy shift needed; incentives optional
High – Shows BD is opening high-value service sectors; politically attractive
6
Propose US Automakers Set Up Car Plant in Exchange for Raw Material Tariff Cuts
Moderate
High – $500M–$1B; requires tax holidays, land, infra support
Very High – Flagship investment; geopolitical leverage for tariff immunity
Detailed Initiative Breakdown
1. Boost U.S. Agricultural Imports (Soy, Wheat, Cotton)
Feasibility: High. Bangladesh already imports U.S. cotton; wheat and soy procurement can be shifted through G2G MoUs and tender prioritization.
Investment: Moderate. FX reallocation required; possible temporary subsidies.
Diplomatic Value: High. Directly reduces U.S. trade deficit and appeals to Trump’s rural base.
Challenges: Volatility in U.S. prices due to climate events (e.g., 27% soy price spike in 2024), resistance from domestic millers reliant on cheaper Indian and Russian wheat.
Recommendation: Structure MoUs with volume bands; offer pilot incentives to local millers; develop FX risk buffer. Proactively communicate policy rationale through targeted outreach to local millers, importers, and chambers of commerce.
2. Sign Long-Term U.S. LNG Deals
Feasibility: High. Energy demand is growing; MoUs already signed with Argent LNG.
Investment: High. $10–15B over 20 years including infrastructure.
Diplomatic Value: Very High. Aligns with U.S. energy export goals and boosts U.S. geopolitical stake.
Recommendation: Negotiate hybrid pricing; seek U.S. EXIM support; fast-track LNG terminal construction. Incorporate public communication efforts to highlight long-term national energy security.
3. Offer Equity to U.S. Firms in Infrastructure/Energy
Feasibility: Moderate to High. FDI frameworks exist; requires tax and repatriation reform.
Investment: Low to Moderate. Mostly legal and tax adjustments.
Diplomatic Value: High. Brings in long-term U.S. capital and stakeholder interest.
Challenges: Political resistance (62% oppose foreign equity); potential IMF conflict over tax breaks.
Recommendation: Limit to minority stakes; align tax incentives with IMF structural benchmarks. Engage political stakeholders and civil society early through strategic media briefings.
4. Partner with U.S. Mutual Funds on a Bangladesh Sovereign Wealth Fund (SWF)
Feasibility: Moderate. Political will exists; institutional capacity needs development.
Investment: Moderate to High. $2–5B initial capital needed.
Diplomatic Value: Moderate. Builds long-term trust with U.S. institutions.
Hurdles: SWF legislation lacks transparency; India pursuing similar Wall Street partnerships.
Recommendation: Fast-track SWF governance bill; differentiate with climate/youth focus fund. Develop a stakeholder communication plan to build domestic buy-in and address public concerns over fund control.
5. Facilitate U.S. Private Equity Access to Healthcare
Investment: Low to Moderate. Incentives optional if regulations are clear.
Diplomatic Value: High. Politically attractive and aligns with digital health expansion.
Regulatory Gaps: Foreign majority ownership currently barred under Medical Licensing Act.
Recommendation: Create healthcare economic zones; enable joint ventures or minority control mechanisms. Develop cross-ministerial task force to streamline licensing, and engage health industry associations in the reform process.
6. US Automotive Investment for Tariff Relief
Feasibility: Moderate. Labor advantage exists; infra gaps remain.
Investment: High. $500M–$1B plus policy and infrastructure support.
Diplomatic Value: Very High. Strong geopolitical signaling and trade leverage.
Challenges: Bangladesh ranks 176th in road quality; regional competition from Vietnam/India.
Recommendation: Begin with assembly or parts plant; co-invest with Japan/Korea to upgrade infra. Engage local media and automotive associations to build public support for long-term economic benefits.
Risk Scenarios & Success Metrics
To ensure adaptability and track progress across the six strategic pillars, we recommend attaching risk scenarios and KPIs to each initiative.
Secure two anchor deals with U.S. PE firms and issue joint announcements.
Mid-Term (6–18 months)
U.S. Equity Participation:
Draft dividend withholding tax reduction package and fast-track legal review.
Form Investment Fast Track Unit under PMO to facilitate U.S. infrastructure funds.
Conduct U.S. Infrastructure Investment Roundtable in Washington.
Sovereign Wealth Fund Setup:
Pass SWF legislation in parliament; assign BFR to structure fund governance.
Open RFP for U.S. fund managers to bid for BD SWF asset management.
Hold launch event with U.S. State Department and Wall Street invitees.
Long-Term (18–36 months)
Automotive Flagship Deal (US Automakers):
Commission feasibility study on BD’s automotive policy roadmap.
Prepare BD Investment Proposal Deck for US Automakers with ROI projections.
Coordinate outreach through U.S. Embassy, AmCham, and USTR.
Tie deal publicly to a “reciprocal tariff understanding” during bilateral visit.
Negotiated Tariff Package:
Use all above actions to present Bangladesh’s reciprocal compliance case.
Appoint a Chief Trade Negotiator with experience in U.S. diplomacy.
Formally request a “Bangladesh Tariff Waiver Protocol” via USTR and White House Trade Council.
Bangladesh Tariff Waiver Protocol (BTWP)
Bangladesh should formally propose a time-bound “Tariff Waiver Protocol” to the U.S. Trade Representative (USTR), requesting targeted tariff relief on RMG exports in exchange for a strategic trade realignment. This realignment would include commitments to increased U.S. imports, LNG procurement, and expanded investment access for American firms. The proposal should be advanced through a special session of the TICFA and backed by proactive engagement with the USTR, White House Trade Council, and influential U.S. industry lobbies—including agriculture, energy, and finance. Bangladesh’s Embassy in Washington should coordinate diplomatic efforts, supported by a high-level domestic trade task force. The overarching goal is to institutionalize mutual trade reciprocity and safeguard long-term U.S.-Bangladesh economic relations from potential disruption.
Strategic Risk Mitigation Recommendations
Create a “Tariff Response War Room” under the Chief Adviser’s Office with MOUs, KPI tracking, and quarterly progress dashboards.
Establish an Embassy Liaison Cell in D.C. to coordinate with USTR, Commerce, and U.S. business councils.
Initiate a bilateral Trade & Investment Dialogue with a focus on reciprocal arrangements and dispute resolution early on.
Proof of Capability
Healthcare Investment: TPG-backed Evercare Health Network expanded in Dhaka through a $100 million private equity deal, highlighting Bangladesh’s openness to regulated, high-standard healthcare investments.
Infrastructure Delivery: Japan-backed projects—including the $4.5 billion Matarbari deep sea port, power plant, and transport corridor—demonstrate Bangladesh’s ability to execute complex, multi-phase infrastructure with international partners.
Trusted Partnerships: The Ministry of Economy, Trade and Industry (METI) of Japan has sustained over a decade of strategic engagement with Bangladesh, channeling over $12 billion in Official Development Assistance (ODA) through transparent, long-term financing frameworks.
U.S. Readiness: U.S. energy giant Chevron has operated successfully in Bangladesh for over two decades, managing major gas fields and reinvesting in production expansion. Alongside Evercare, these success stories reflect a maturing investment climate—positioning Bangladesh as a credible destination for future U.S. capital across energy, infrastructure, and healthcare.
Conclusion
Bangladesh must engage the Trump administration not as a petitioner, but as a strategic partner. The initiatives outlined in this playbook reframe the narrative—from dependency to reciprocity, and from seeking relief to offering opportunity. By opening our markets, aligning with U.S. priorities, and driving mutually beneficial trade flows, Bangladesh positions itself as a serious, sovereign actor in global commerce.
With disciplined execution, unified leadership, and timely diplomacy, Bangladesh can not only navigate the current tariff challenge—but emerge stronger, more resilient, and globally recognized as a trusted partner in the U.S. economic and strategic landscape.
Prepared By: UBUI Board of Directors
Appendix A: Sources & Reference Documents
U.S. Census Bureau – Foreign Trade Statistics, 2023–2024
Office of the U.S. Trade Representative – 2024 Special 301 Report
U.S. Department of Energy – LNG Exporter Reports, 2022–2025
Bangladesh Ministry of Commerce – Export Promotion Bureau Reports, 2023
Bangladesh Bank – Monthly Economic Trends, 2024
The Diplomat – “Bangladesh Looks to U.S. Cotton to Avoid Garment Tariffs,” Feb 2025
Reuters – “Bangladesh Signs Landmark LNG MoU with Argent Energy,” Jan 2025
World Bank – Bangladesh Development Update, Oct 2024
McKinsey & Company – “The Future of Bangladesh’s RMG Sector,” 2023
Brookings Institution – “Reciprocity in U.S. Trade Policy Under Trump,” 2020
Bloomberg – “EU Buys More U.S. Soybeans to Cool Tariff War,” Aug 2018
IMF – Bangladesh Country Report No. 24/33, January 2025
UNCTAD – World Investment Report: South Asia Chapter, 2024
U.S. Department of State – 2024 Investment Climate Statements: Bangladesh
Financial Times – “TPG-backed Evercare Expands in Dhaka,” June 2020
The Economic Times – “India, Japan & Vietnam Move to Buy More U.S. LNG,” 2024
Nikkei Asia – “Bangladesh Offers Infrastructure Equity to U.S. Firms,” March 2025
U.S. Chamber of Commerce – Indo-Pacific Investment Framework (Bangladesh Chapter), 2025
WTO – Trade Policy Review: Bangladesh (2024)
Council on Foreign Relations (CFR) – “The U.S. Trade Strategy and the Return of Tariff Diplomacy”
Appendix B: Talking Points for Bangladeshi Diplomats and Diasporas
Core Strategic Messages for U.S. Audiences
“Bangladesh is not asking for charity—we’re offering strategic alignment that benefits both nations.” ➤ This frames the country as a confident partner, not a petitioner.
“Every dollar of U.S. cotton, wheat, or liquefied natural gas (LNG) we import supports American farmers and energy workers—this is real, reciprocal trade.” ➤ Connects to U.S. domestic priorities in agriculture and energy exports.
“Our ready-made garment (RMG) sector supports over 4 million workers, most of them women—blanket tariffs hurt livelihoods and disrupt stable supply chains for U.S. buyers.” ➤ Combines human rights, women’s employment, and business continuity in one message.
“We are opening our infrastructure, energy, and healthcare sectors to U.S. equity and private capital—we want American firms to win in South Asia.” ➤ Directly appeals to American investors and competitiveness narratives.
“Bangladesh proposes a targeted ‘Tariff Waiver Protocol’—relief on key export categories in exchange for stronger U.S. trade flows and long-term market access.” ➤ Makes the deal simple, transactional, and politically sellable in D.C.
“Let’s activate the Trade and Investment Cooperation Framework Agreement (TICFA) to codify a durable U.S.–Bangladesh trade partnership—this is about long-term strategy, not short-term fixes.” ➤ Grounds the proposal in an existing legal framework and highlights Bangladesh’s maturity as a trade partner.
Appendix C: List of Acronyms
RMG
Ready-Made Garments
USTR
United States Trade Representative
LNG
Liquefied Natural Gas
FTA
Free Trade Agreement
TICFA
Trade and Investment Cooperation Framework Agreement
EXIM
Export-Import Bank of the United States
FDI
Foreign Direct Investment
SWF
Sovereign Wealth Fund
TPG
Texas Pacific Group (Private Equity Firm)
METI
Ministry of Economy, Trade and Industry (Japan)
ODA
Official Development Assistance
MoFA
Ministry of Foreign Affairs (Bangladesh)
MoC
Ministry of Commerce (Bangladesh)
PMO
Prime Minister’s Office
KPI
Key Performance Indicator
JV
Joint Venture
AUM
Assets Under Management
OEM
Original Equipment Manufacturer
BGMEA
Bangladesh Garment Manufacturers and Exporters Association
BFR
Bangladesh Financial Regulator (placeholder for actual agency if unnamed)
