US President Donald Trump has done what he had long wanted to do – try to increase America's revenue in every possible way. As Trump was heard saying, "I could've come up with 100 percent reciprocity but this time closed on 50 percent only." His trade accounting people, though, seemed to have goofed up between trade volume and duty percentage, but so be it.

With this new reciprocal tariff, Bangladesh – especially its $8 billion-plus apparel export sector – is set to face fresh economic pressure, as its exports to the United States will now be subject to a 37 percent "reciprocal tariff", slightly higher than those of India, Pakistan and Türkiye.

The measures mark President Donald Trump's most aggressive challenge yet to the post-World War II global trade order, triggering alarm among economists and industry leaders worldwide. Under the new structure, a minimum 10 percent tariff will apply to all US imports, while steeper, country-specific "reciprocal" tariffs will target around 60 nations, including Bangladesh. Previously, Bangladeshi goods entered the US market with an average duty of 15.62 percent.

As many have noted, Bangladesh's predominant export and employment-generating apparel sector is likely to bear the brunt of this change. The United States has historically been a top export destination for Bangladeshi apparel, and such a steep tariff could significantly reduce competitiveness. The US accounts for almost 20 percent of Bangladesh's total cross-border exports.

Bangladesh's exports to the US rose 1.1 percent year-on-year to $8.4 billion in 2024, driven largely by the country's dominant apparel exports. Its imports from the US totaled $2.2 billion in 2024, a 1.5 percent decrease from the previous year. As a result, the US trade deficit with Bangladesh widened to $6.2 billion.

Though this is still an evolving scenario and too early to comment on the overall country-to-country impact, the reciprocal tariff regime applies different rates to different countries – and even product categories – making the global trading environment more fragmented and unpredictable, with the list of possible winners and losers unclear.

Following the possibility of Trump's tariff announcement, major clothing retailers, including H&M, have already expressed concern. Many such off-takers noted that the tariffs were likely to lead to increased prices for US consumers, signalling potential knock-on effects, including a possible recession.

There is no denying that Bangladesh must respond strategically and proactively to this. Business leaders seem to be relying too much on the global goodwill of Nobel Laureate Yunus, our interim government head.

A few also believe that, to navigate these rough waters, Bangladesh must rethink its domestic trade regime, engage actively in reforming the global trade system, and enhance trade integration with key partners to secure its position in the evolving global trade architecture.

Bangladesh is not alone – other Asian nations are also in the line of fire. Vietnam faces a 46 percent tariff, while other nations are also slapped with higher tariffs: Japan at 24 percent, South Korea at 25 percent, India at 26 percent, Cambodia at 49 percent, and Taiwan at 32 percent.

China, the primary focus of Trump's trade agenda, will face a 34 percent reciprocal tariff, which stacks atop an existing 20 percent fentanyl-related duty and separate levies on categories like solar panels. That brings the effective tariff rate on many Chinese goods to well above 50 percent. Some analysts warn this could result in up to a 90 percent decline in Chinese exports to the US by 2030.

Setting other countries aside, Bangladesh could possibly revisit its import tariffs for "Made in USA" items, as these are insignificant in volume, to mitigate the reciprocity effect. The country is a major importer of US cotton. Any arrangement to apply lower tariffs for US cotton-made apparel could have also helped us and had been under discussion for the last few years.

Above all, nothing can replace proactive trade diplomacy, especially vis-à-vis other similar competitors. Too much internal political turmoil is consuming valuable time that should be spent fixing the cross-border economic order.

The writer is an economic analyst and chairman at Financial Excellence Ltd.