The Centre for Policy Dialogue (CPD) on Thursday called for a review of Bangladesh’s trade arrangement with the United States after Washington proposed additional tariffs on imports from countries it says have failed to address forced labour concerns.
Speaking at a media briefing on the state of the Bangladesh economy in FY2025-26, CPD Distinguished Fellow Mustafizur Rahman said imposing another 10 per cent tariff would not solve forced labour concerns and could instead worsen underlying vulnerabilities.
The comments came after the Office of the United States Trade Representative proposed additional duties of 10-12.5 per cent on products from about 60 countries, including Bangladesh.
Mustafizur said Bangladesh’s realities are not always fully reflected in foreign assessments, noting that child labour often stems from household economic hardship. He questioned whether higher tariffs would address the issue and argued that greater support for reducing child labour would be more effective.
According to him, Bangladesh already faces an average tariff burden of about 15 per cent in the US market and had negotiated an additional 19 per cent duty under an earlier arrangement, taking the total to about 34 per cent. A further 10 per cent tariff would raise that to roughly 44 per cent, weakening Bangladesh’s competitiveness against countries that did not enter similar agreements.
“The agreement should be revisited,” he said, adding that higher tariffs would not resolve forced labour issues in the country. Instead, it would intensify them.
Presenting CPD’s assessment, “State of the Bangladesh Economy in FY2025-26: Multidimensional Challenges during the Transition Period”, CPD Executive Director Fahmida Khatun said Bangladesh’s recovery and long-term resilience depend on stronger institutions, improved governance and greater accountability.
CPD said the economy continues to face pressure from weak revenue collection, persistent inflation, banking-sector fragility and rising energy costs despite signs of resilience in some areas.
Revenue mobilisation grew 6.9 per cent during July-March against a target of 29.3 per cent, while National Board of Revenue collections fell short by Tk1,04,533 crore. Inflation stood at 9.04 per cent in April and private-sector credit growth slowed to a record low 4.72 per cent in March.
The think tank also highlighted weaknesses in the banking sector and called for accelerated reforms to strengthen financial stability and confidence.
Despite the challenges, Bangladesh’s external sector remained resilient. The balance of payments recorded a $3.6 billion surplus during July-March FY26 compared with a $1.1 billion deficit a year earlier, supported by 19.8 per cent growth in remittance inflows and increased external financing.
However, CPD cautioned that much of the improvement was driven by debt-creating financial inflows rather than a sustained strengthening of underlying economic fundamentals.
The organisation also recommended stronger revenue mobilisation, improved fiscal management, better social protection and reforms across key sectors to strengthen the economy’s ability to withstand future shocks.
