After the US Supreme Court strikes down reciprocal tariffs: Why Bangladesh must reassess its bilateral trade deal with the US

From a legal standpoint, the Supreme Court’s ruling leaves limited room for ambiguity. The practical implications, however, remain uncertain, not least because the US President Donald Trump administration’s response is still unclear. The reciprocal tariffs in question were introduced under the International Emergency Economic Powers Act (IEEPA), yet the Supreme Court determined that the statute does not authorise measures of unbounded scope, magnitude, and duration, particularly given Congress’s constitutional primacy in tariff-setting. 

Yet the policy environment does not become calmer as a result. It becomes murkier. The reason is simple: the ruling closes one route, but it does not remove the underlying political preference within the administration for using tariffs as leverage, and it does not exhaust the US President’s tariff toolkit. 

For Bangladesh, the immediate implication is that the bilateral agreement just signed now sits on shifting ground. A large part of its logic was anchored to a specific tariff regime, including a reduced “reciprocal” tariff rate and related conditions. If the legal foundation of that tariff regime is removed, the agreement’s operational value and bargaining context must be re-evaluated, clause by clause, through a sober mapping of what is still executable, what becomes moot, and what remains binding as a matter of bilateral commitment even if the original tariff threat is weakened. 

This distinction matters because in trade diplomacy, commitments do not always vanish simply because the initial leverage instrument is curtailed. They can reappear as expectations, “understandings”, or benchmarks in the next round of pressure.

Can the US still pressure Bangladesh bilaterally to operationalise the signed agreement? Yes, and it is not difficult to see how, even after the Court’s ruling. First, the administration can attempt to recreate pressure using other statutory authorities, though these involve procedural steps and are not always as fast or as sweeping as IEEPA. 

Commentators and trade-law specialists have already pointed to alternatives such as Section 232 (national security), Section 301 (unfair trade practices), and Section 122 (temporary balance-of-payments surcharge with limits), among others. Even where these tools are slower or narrower, they can still produce credible uncertainty for exporters and investors, and uncertainty itself is bargaining power. 

Second, pressure does not have to be purely tariff-based. The US can use sequencing and implementation discretion, for example, how quickly it operationalises promised tariff adjustments, how it interprets compliance-related clauses, or how it links trade cooperation to wider diplomatic or security cooperation. Those moves can be quiet, and therefore more difficult for Dhaka to contest publicly, but they can be materially felt by firms.

So what should Bangladesh do now, in practical terms, without turning the situation into a public standoff?

Buy time, but do so formally, not passively

The Supreme Court ruling provides a legitimate, non-confrontational basis to request a “technical pause” for legal and economic review, framed as due diligence to ensure implementability under the changed US legal context. This is not a delay for its own sake. It is an evidence-based request grounded in an altered legal reality.

Ring-fence the binding parts and identify what is conditional

Bangladesh should instruct a rapid legal scrub of the signed text (and any annexes or side letters) to distinguish (a) commitments that become redundant if reciprocal tariffs are vacated, from (b) commitments that could still be demanded independently, especially procurement-related undertakings and regulatory or standards commitments. This is where hidden fiscal, industrial policy, and competition implications often sit.
 

Shift the dialogue from “tariff relief” to “predictable, rules-based access”

 If the US cannot rely on IEEPA for broad reciprocal tariffs, it may seek other tools, but those tools typically involve more process. Bangladesh should use that procedural reality to argue for predictability, transparency, and consultative sequencing, rather than episodic pressure. 

Do not over-correct through public messaging

The temptation will be to treat the ruling as Bangladesh’s “escape route”. That is strategically unwise. A measured line is safer. Bangladesh respects the US legal process, is studying implications, and remains committed to constructive engagement with the United States, while ensuring that any operational steps are consistent with national interest and legal certainty.

The bottom line is this. The ruling limits one presidential instrument, but it does not dissolve US negotiating ambition, nor does it automatically neutralise bilateral commitments already signalled. Bangladesh should therefore act as though pressure can return in a different legal form, at a different tempo. That is precisely why buying time must be paired with preparation, coalition management, and a disciplined, technical review of what Bangladesh has already agreed, and what, in the new circumstances, it should seek to clarify, sequence, or reopen.

The author is an economist and chairman of Research and Policy Integration for Development (RAPID). He can be reached at m.a.razzaque@gmail.com.