Will Trump’s tariff policy benefit Bangladesh? The world started getting ready for Donald Trump’s possible economic policies after he was elected president of the United States. Tariffs are supposed to be the mainstay of the trade policy he carries out. Trump’s approach may present some chances for Bangladesh, according to Dhaka business leaders and analysts, but preparedness is necessary.
Will Trump’s tariff policy. Donald Trump will start his second term in office in January. He has stated that goods coming into the US will be subject to a least 10% tariff in the interim. This tax could reach 60% to 100% for certain nations. This trade war weapon, which primarily targets China, is already well-known as the “Trump Tariff.”
During his first term, Trump had already launched a trade war against China, levying up to 25% tariffs on Chinese goods valued at hundreds of billions of dollars. Tariffs on Chinese goods will undoubtedly rise even more under his next administration. China was the United States’ main supplier of low-cost goods for a very long period. In order to find reasonably priced goods, American importers will now turn to other countries. Will Trump’s tariff policy.
Vietnam, the beneficiary
In the end, everyone wins from a war. Among the nations that have benefited from Trump’s trade war is Vietnam. The trade war has forced China to look for different approaches. In order to gain easier access to the U.S. market, China expanded its investments in other nations throughout the world during this period. Will Trump’s tariff policy.
The head of the American Chamber of Commerce (AmCham) in Dhaka, Syed Ershad Ahmed, claimed that Vietnam gained the most from Trump’s policies during his first term. This is because Chinese manufacturers boosted their investments in Vietnam as a substitute in order to preserve their market dominance in the US. A number of Chinese businesses relocated their factories to Vietnam.
After Joe Biden was elected president, the United States continued to impose tariffs on commodities from China. Consequently, Vietnam remained a top destination for Chinese investment under the Biden administration. This was due to the fact that Vietnam had been gaining market share in the United States. In 2023 alone, China invested $45 billion in Vietnam, according to a research by the international bank HSBC.
According to the HSBC research, China’s investment in Vietnam rose by 77.6% in 2023 over the year before. In 2023, prominent Chinese corporations accounted for 20% of all foreign investments in Vietnam.
Vietnam hoped that Chinese enterprises would relocate their operations abroad, with Vietnam being one of their chosen destinations, in order to avoid possible hefty tariffs following Donald Trump’s election as president. The largest spike in share prices in a single day occurred on November 6, the day following the election, for significant corporations selling industrial plots in Vietnam. Will Trump’s tariff policy.
Will Trump’s tariff policy
A portion of China’s production system moved to nations like Vietnam, India, Malaysia, and Thailand as a result of Donald Trump’s well-known “China Plus One” administration. Vietnam benefited the most from its close proximity and inexpensive labor. These days, Chinese businesses are investing heavily in industries including solar, batteries, electric cars, and mineral resources.
Relocation of the Factory
Nowadays, a large number of Chinese investors are considering establishing a production system abroad. American businesses and investors are keenly interested in Vietnam’s advantages, according to Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, who spoke to Reuters. Under the Trump administration, this pattern will persist.
Despite numerous attempts to entice foreign investment to Bangladesh, Syed Ershad Ahmed stated that it is imperative to look at the reasons for the lack of substantial Chinese investment in the nation. When it comes to investing, there are a number of challenges that need to be resolved first. Taking care of the existing foreign investors is the most crucial aspect.
“Our country needs branding,” the AmCham president added, underscoring the importance of economic diplomacy. Qualified individuals from the business sector should be sent overseas to serve as commercial counselors. You must first concentrate on your own nation. You won’t be able to benefit from Trump’s policies otherwise.”
Will Trump’s tariff policy
If Donald Trump’s tariff agenda against China is implemented, the trade war between the two biggest economies will cause global financial instability. Asian nations will probably experience the biggest disturbance. Analysts predict that another round of factory relocation will occur as a result of China’s incredibly high tariffs.
“Bangladesh has not made much progress in removing the barriers to attracting Chinese or any foreign investment,” stated Mohammad Abdur Razzaq, chairman of the research organization Research and Policy Integration for Development (RAPID). For this reason, there has to be a lot of reform in this area. Will Trump’s tariff policy.
According to Mohammad Abdur Razzaq, Bangladesh is falling behind in all areas of investment, including the cost of doing business, regulatory systems, offering all services through a single window, land availability for factories, various services, port facilities, customs, bureaucracy, corruption, and dispute resolution systems.
The foreign exchange reserve status is also important in luring international investment, according to the RAPID chairman. “Investors lose confidence if a country’s foreign exchange reserves are under pressure,” he said. Foreign investment may be deterred if Bangladesh’s reserve situation does not improve.
Will Trump’s tariff policy
