Bangladesh Trade Strategy Under PM Tarique Rahman Faces US China Balancing Test

Structural Challenges Emerge in Dhaka’s Global Trade Realignment​

New Delhi, February 24: Bangladesh, led by newly appointed Prime Minister Tarique Rahman, is navigating complex structural challenges as it seeks to balance its trade and strategic ties between the United States and China, both of which remain critical economic partners, according to a recent Nikkei Asia report.

The report highlights that the terms of a proposed trade arrangement with the United States underscore the delicate balancing act Dhaka must perform as Washington and Beijing compete for influence in the country.

US Trade Deal Signals Strategic Leverage​

While Washington is promoting enhanced market access, deeper security cooperation, and regulatory alignment, the agreement reflects a broader strategic intent.

Despite the US Supreme Court striking down reciprocal tariffs introduced by President Donald Trump, the report notes that the revised trade framework indicates Washington’s interest in preventing Bangladesh from moving closer to rival powers.

Under the proposed structure, failure to adhere to agreed provisions could result in tariffs reverting to 37 per cent from the reduced level of 19 per cent. Bangladesh is also expected to align with US export controls and sanctions requirements.

The report further states that if Washington introduces new trade or border measures on economic or national security grounds, Dhaka would be required to consult with US authorities and may need to adopt corresponding steps.

China’s Deep Industrial Footprint in Bangladesh​

In contrast, China’s engagement with Bangladesh is described as deeply integrated into the country’s industrial ecosystem.

Chinese foreign direct investment in Bangladesh has reached approximately 3 billion dollars. Beijing has also extended zero tariff access to Bangladeshi exports, alongside similar benefits for several other least developed countries.

According to Faiz Sobhan, senior research director at the Bangladesh Enterprise Institute in Dhaka, navigating the current polarized global environment shaped by great power rivalry presents structural difficulties for Bangladesh.

Export Dependency Raises Strategic Risk​

Bangladesh remains heavily dependent on exports to the US market. This reliance increases the potential risk associated with non compliance under the proposed trade deal framework.

While US leverage is concentrated in trade and security dimensions, China’s position is embedded within Bangladesh’s manufacturing backbone. The report notes that China supplies a significant portion of the goods that support Bangladesh’s manufacturing sector, particularly the garment industry.

As geopolitical competition intensifies, Bangladesh’s trade strategy under Prime Minister Tarique Rahman is set to face sustained pressure from both global powers, making economic diplomacy central to its foreign policy calculus.