What US tariff ruling means for Bangladesh

This roller coaster began on April 2, 2025, when the United States imposed broad reciprocal tariffs under emergency powers. It seemed to stabilise on February 9, 2026 with a reciprocal trade agreement with Bangladesh. The drama returned on February 20, when the US Supreme Court, in a 6 to 3 decision in Learning Resources, Inc. v. Trump, struck down Trump’s IEEPA based tariffs. For a moment, relief from higher duties appeared possible. Within hours, the White House moved to keep most tariffs in place under a different legal route.

The court ruled that IEEPA does not authorise broad, across the board tariffs. Setting tariffs is primarily the responsibility of Congress, not something a president can do by declaring an economic emergency. Importers such as Learning Resources argued that the president had exceeded what Congress intended, and they prevailed. The administration had anticipated the setback and was ready to pivot.

On the same day, it unveiled a two-track approach: a short-term bridge and a longer-term plan.

Under Section 122 of the 1974 Trade Act, the president can impose a temporary import surcharge of up to 15 percent for no more than 150 days, unless Congress extends it. A 10 percent global surcharge took effect on February 24, 2026 and can remain until around July 24 unless ended earlier. That deadline is now a key pressure point in negotiations.

For the longer term, Washington is shifting to Section 301 as the main legal basis for more durable, targeted tariffs. This relies on investigations and keeps Section 232 security tariffs, anti-dumping duties and safeguards in play. When Section 122 authority expires, countries without new agreements may not see tariffs fall. They could instead face longer term Section 301 rates of 25 to 50 percent, alongside other remedies. The present 10 percent surcharge is therefore a temporary bridge, not a settlement.

Washington first used IEEPA for speed, avoiding lengthy Section 301 investigations while holding that option in reserve to press for early deals. After the Supreme Court dismantled that approach, the United States did not retreat from tariffs. It signalled that once Section 122 ends, Section 301 will take centre stage.

For Bangladesh, the earlier agreement has not yet been implemented, and several steps remain before it takes effect. Its future is uncertain. In the short term, Bangladesh is likely to face the 10 percent global tariff for the full 150 days. After that, a fresh negotiation could deliver improved terms. If no deal is activated, Bangladesh risks higher, longer-term Section 301 tariffs, potentially above the earlier 19 percent rate, along with other trade remedies.

Washington will seek to secure protection for its firms and supply chains. Dhaka will aim for more flexible commitments than those in the previous understanding. It is also likely that the United States will expect compliance with previously agreed terms, including the 19 percent tariff under the initial deal.

The United States remains Bangladesh’s largest single-country export market, built on a long and mutually beneficial trade relationship. Any dispute should be resolved through dialogue and compromise to preserve trust, protect market access and safeguard long-term prospects.

If space remains for renewed negotiation, Bangladesh could pursue a three-pillar strategy to move from low-cost supplier to strategic partner.

First, cotton apparel reciprocity: use US cotton in apparel production in exchange for zero tariffs on those garments. This would support US farmers and return higher-value apparel to the US market, while giving Bangladesh a competitive edge. Second, calibrated managed trade: targeted and economically justified purchase commitments, such as aircraft or LNG, to help narrow the trade deficit and deepen interdependence, without exceeding fiscal limits. Third, geopolitical alignment: secure ports and digital infrastructure with US-aligned technology, strengthening the relationship into a broader strategic partnership and reducing the risk of future trade shocks.

The writer is a former director of BGMEA and additional managing director at Denim Expert Ltd. He can be reached at mohiuddinrubel@gmail.com