The average tariff rate on imports from the United States to Bangladesh was 6 per cent last year. This means that for every 100 taka worth of goods imported from the US, the government collected an average of 6.15 taka in duties and taxes. However, import-stage taxes such as value-added tax (VAT), advance income tax (AIT), and advance tax (AT) are later adjusted by businesses. Excluding these three adjustable taxes, the effective average tariff rate stood at 2.20 per cent. This analysis is based on data from the National Board of Revenue (NBR).
US President Donald Trump on Wednesday announced the imposition of counter-tariffs on products exported from various countries, varying by country.
Following this, the Bangladeshi government announced a review of tariffs and duties on imports from the US. This brought the issue of average tariffs on US imports and tariff rates on specific goods into focus once again.
Trump’s counter-tariff policy is based on trade deficits and US import statistics. According to his approach, reducing counter-tariffs would require lowering the trade deficit. An easy way to achieve this is by offering tariff reductions on US goods. In response, the NBR and the Bangladesh Trade and Tariff Commission have begun examining potential actions regarding the US counter-tariffs.
When asked about this, NBR Chairman Abdur Rahman Khan stated that they are considering what steps can be taken regarding tariff reductions on US imports. A meeting on this issue is scheduled at the NBR on Sunday.
The average tariff on US goods is 6 per cent
An analysis of NBR data reveals that last year, Bangladesh imported goods worth $2.91 billion from the US. The total assessed value of these imports was Tk 351.89 billion, from which total tariff revenue of Tk 21.66 billion was collected—an average tariff rate of 6.15 per cent.
In the July-March period of fiscal year (FY) 2024-25, taxes on US imports brought in just around Tk 1,000 crore — less than 2 percent of the total revenue collected from all imports during that period.
Bangladesh imported goods worth Tk 22,168 crore from the US during those nine months, with tax receipts from those imports totalling Tk 1,010 crore, according to the National Board of Revenue (NBR).
In contrast, overall revenue from global imports reached Tk 64,439 crore during the period, according to the latest NBR report.
The scenario was similar in FY24, when tax collected from US imports amounted to Tk 1,499 crore against total revenue of Tk 100,819 crore, which was around 1.5 percent of Bangladesh’s total earnings from import duties.
The country’s import payments stood at Tk 702,230 crore in FY24, of which Tk 28,144 crore went to the US, reflecting only 4 percent Bangladesh’s total merchandise imports, according to the Bangladesh Bank data.
In FY23, tax collected from US imports amounted to Tk 1,316 crore.
In the first nine months of the current fiscal year, Bangladesh imported more than 2,200 items from the US, but just 10 of those accounted for over Tk 500 crore in tax revenue.
Among these, motor cars faced the highest total tax incidence (TTI) at 150.76 percent, while chemical wood pulp had the lowest at 20 percent.
Bangladesh has over 7,500 tariff lines, with the highest TTI reaching as much as 1,021 percent.
In terms of value, major imports from the US included ferrous waste and scrap at Tk 202 crore, artificial filament tow of cellulose acetate at Tk 118 crore, and almonds at Tk 55 crore.
US imports to Bangladesh mainly fall into two categories: raw materials for export-oriented industries under bonded warehousing and goods for domestic consumption. Last year, Bangladesh imported around $290 million worth of raw materials for export production, which were exempt from duties. Additionally, among the $2.61 billion worth of imports for domestic use, $790 million worth of goods were also duty-free.
The Highest Tariff is 611 per cent
Last year, Bangladesh imported goods under 2,515 different HS codes (product classification codes) from the US The highest tariff rate applied was 611 per cent, while the lowest was 0 per cent.
Among the highest-taxed imports from the US was whiskey, which carries a tariff rate of 611 per cent. However, the import volume is minimal. Last year, only 228 bottles of Jack Daniel’s whiskey were imported from the US, generating Tk 3.1 million in tariff revenue.
The second-highest tariff rate applies to Mercedes-Benz cars, taxed at 443 per cent. Only four such vehicles were imported last year, yielding Tk 1.485 billion in tariff revenue.
The third-highest tariff rate, at 289 per cent, applies to vapes and e-cigarettes. Imports of these products amounted to only $73,000 last year, yet they generated Tk 300 million in tariff revenue.
The fourth-highest tariff category includes air-conditioned vehicles with engine capacities between 1,600 and 2,000 cc. Imports in this category resulted in Tk 515 million in tariff revenue.
Highest Revenue-Generating Product: Scrap Iron
According to NBR data, the highest revenue from US imports comes from scrap iron, used as a raw material for rod production. A fixed tariff is imposed per metric ton, leading to an effective tariff rate of 4 per cent. Last year, this sector contributed Tk 4.5 billion in tariff revenue.
Potential Areas for Tariff Reduction
Tariff rates are generally similar across all countries, except where free trade agreements (FTAs) apply, such as the South Asian Free Trade Area (SAFTA), which grants tariff benefits on specific products. It remains unclear which specific US imports the Bangladeshi government might reconsider for tariff reductions. Reducing tariffs would likely involve luxury goods, as these products face the highest duty rates.
Due to the greater shipping distance, importing from the US is more expensive. Consequently, Bangladesh imports more goods from closer countries like India and China. Nevertheless, many US products are imported due to their quality and availability.
