On 2 April 2025, the President of the United States issued an Executive Order titled “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits.” Through this Order, the President declared a national emergency under the International Emergency Economic Powers Act (IEEPA), citing the threat posed by persistent U.S. trade deficits to national security and the economy.
The Order imposed an additional 10 per cent reciprocal tariff on imports from all countries with effect from April 5, 2025, while 57 countries were subjected to country-specific reciprocal tariffs ranging from 11 to 49 per cent. Given that the United States accounted for approximately 14 per cent of global imports in 2024, many exporting countries moved quickly to negotiate trade arrangements with the U.S. to mitigate the impact of these tariffs.
Reportedly, the administration of Donald Trump concluded reciprocal trade arrangements with several countries, including the European Union and Japan, although many of these agreements have not been publicly disclosed. As of March 13, 2026, the Office of the United States Trade Representative had uploaded Agreements on Reciprocal Trade (ART) with nine countries on its website, including five from Asia and four from South America.
As reflected in the statistics presented in Table 1, Chinese Taipei has the highest dependence on the U.S. market, with exports to the United States accounting for 96 per cent of its total exports. Cambodia ranks next, followed by Guatemala and El Salvador.
A review of the ARTs signed by the nine countries indicates that the United States largely provided a standard text to all participating countries. The agreements generally contain six chapters along with annexes setting out specific commitments and schedules of concessions. These include:
Section 1. Tariffs and Quotas
Section 2. Non-Tariff Barriers and Related Matters
Section 3. Digital Trade and Technology
Section 4. Economic and National Security
Section 5. Commercial Considerations and Opportunities
Section 6. Implementation, Enforcement, and Final Provisions
There are notable similarities in the commitments undertaken by countries within each section of the agreements. While some countries adopted relatively flexible commitments in certain areas, others undertook more extensive and advanced obligations. In contrast, the United States primarily committed to reducing the reciprocal tariffs imposed under executive order of April 2, 2025.
The purpose of this paper, however, is not to assess the level of commitments undertaken by individual countries, but to examine the consistency of the agreement with World Trade Organisation (WTO) rules and the principle of reciprocity. This assessment is based on a review of the provisions of the ART signed by Bangladesh.
Since 1947, international trade has been governed by the General Agreement on Tariffs and Trade, which was further strengthened through the Marrakesh Agreement Establishing the WTO.
There is little doubt that the reciprocal tariffs imposed by the administration of the United States are inconsistent with the core WTO principle of Most-Favoured-Nation (MFN) treatment, which requires members to apply the same tariff treatment to imports from all WTO members. The reciprocal tariffs also exceed the bound tariff commitments of the United States. While the average bound tariff rate of the United States is 3.4 per cent, its average applied MFN tariff was 3.3 per cent in 2024. The imposition of reciprocal tariffs has effectively increased the average applied tariff by at least 10 percentage points, raising it to over 13.3 per cent, substantially above the bound rate. It may be argued that such measures could be justified under Articles XIX or XX of the General Agreement on Tariffs and Trade (GATT). However, a careful reading of these provisions indicates that the conditions cited in the Executive Order do not appear to satisfy the legal requirements set out under those Articles.
Under the proposed ART, Bangladesh has committed to eliminating tariffs—comprising customs, regulatory, and supplementary duties—on all originating goods of the United States, with limited exceptions, within a period of 10 years. In contrast, the United States would only reduce its reciprocal tariffs on originating products of Bangladesh to 19 per cent and eliminate reciprocal tariff on a limited number of products, including certain agricultural products, non-patented pharmaceutical products, and aircraft parts, while maintaining its MFN duty rates unchanged. Under GATT 1994, trade agreements between developed and developing countries are required to take the form of a free trade agreement or a customs union which entails the elimination of tariffs on substantially all trade between the parties. However, in the case of the ART, while Bangladesh undertakes to eliminate tariffs on a substantial volume of imports from the United States, the United States does not undertake any commitment to eliminate tariffs on substantial volume of imports from Bangladesh. Instead, tariffs on imports from Bangladesh would remain above MFN levels. This represents a significant deviation from GATT principles governing reciprocal tariff liberalisation among WTO members.
Article 2.11.2 provides that Bangladesh shall not challenge any measure adopted by the United States to rebate, or refrain from imposing direct taxes in relation to exports from the United States, whether through countervailing measures or under the WTO dispute settlement mechanism. This raises an important legal question as to whether the United States may adopt such measures if they are inconsistent with the provisions of the Agreement on Subsidies and Countervailing Measures (SCM). To the extent that such tax-related export measures constitute prohibited subsidies under the SCM Agreement, their adoption would amount to a violation of WTO obligations. In such circumstances, while Bangladesh may be precluded from initiating a challenge foregoing its rights available under the SCMAgreement, other WTO Members would retain the right to raise the matter before the WTO dispute settlement system.
Article 1.12.2 of Annex III of the ART obliges Bangladesh not to require an import permit or a letter of credit prior to the shipment of food products or agricultural goods from the United States. However, under the Plant Quarantine Act, the issuance of an import permit is mandatory for agricultural goods, and the Import Policy Order requires the opening of a letter of credit prior to the shipment of most consignments, subject to limited exceptions. In this context, implementing such a provision exclusively in favour of the United States may raise concerns regarding consistency with the Most-Favoured-Nation principle under the WTO framework, as it could result in less favourable treatment being accorded to other trading partners.
The ART contains several provisions relating to sanitary and phytosanitary (SPS) measures and technical standards for agricultural goods, medical devices, pharmaceuticals, motor vehicles, and other products. These provisions oblige Bangladesh to accept standards and conformity assessment certificates issued by the relevant authorities of the United States.
However, under the Agreement on the Application of Sanitary and Phytosanitary Measures, Members are required to ensure that SPS measures do not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between their own territory and that of other Members. Similarly, the Agreement on Technical Barriers to Trade provides that imported products must be accorded treatment no less favourable than that accorded to like domestic products and to like products originating in any other country.
In this context, implementation of the ART may raise concerns among the WTO members regarding Bangladesh’s obligation not to discriminate against other WTO Members, particularly if the tariff reductions granted to goods originating from the United States, as well as the preferential acceptance of U.S. standards and certifications, are not extended on an equivalent basis to other trading partners.
While the ART contains provisions that appear to be inconsistent with WTO rules, it simultaneously obliges Bangladesh to comply with certain transparency and notification requirements under such as subsidy notification under SCM Agreement, as well as obligations relating to customs valuation legislation and the submission of import licensing questionnaires.
This creates a clear tension: on the one hand, Bangladesh may be required to implement commitments that are not aligned with WTO disciplines; on the other, it is expected to maintain compliance with WTO transparency and reporting obligations.
Reciprocity in international trade traditionally refers to the exchange of mutual concessions—such as reductions in tariffs, quotas, or other trade barriers—to promote balanced and fair trade. It does not imply that trade between countries will be equal in value; rather, trade outcomes depend on each country’s production capacity, export competitiveness, and the demand in the importing country for goods produced by the exporting country.
However, under the recent policy approach of the Trump administration, reciprocity has been interpreted more narrowly as a measure of maintaining zero bilateral trade imbalance between two countries. This interpretation departs from the well-recognised conventional understanding and has been subject to criticism from international trade experts. Nevertheless, setting aside such criticism, attempt has been made to assess how this revised notion of reciprocity is even reflected in the ART signed with Bangladesh.
The revised notion of reciprocity appears to be reflected in the agreement through provisions requiring Bangladesh to substantially reduce tariffs and quotas on imports from the United States, accept SPS measures and technical conformity certificates issued by U.S. authorities, and facilitate increased procurement of U.S. goods. Collectively, these provisions are designed to expand U.S. exports to Bangladesh.
According to Bangladesh’s tariff schedule, duties are set to be reduced by between 5 and 640 per cent upon entry into force of the ART. Such significant tariff reductions are likely to create a substantial preference margin in favour of U.S. products, potentially diverting imports from other trading partners towards the United States. Furthermore, the acceptance of U.S.-issued standards and certifications would simplify import procedures, reducing compliance costs and administrative burdens for importers for goods imported from the United States. In addition, the absence of stringent requirements to verify origin may further incentivise imports from the United States. These factors will tempt importers to import goods from United States, even where such products are relatively more expensive than those sourced from other countries. These factors, combined with Bangladesh’s commitments to purchase 14 Boeing aircraft, liquefied natural gas, wheat, soy and soy products, cotton, and U.S. military equipment, are likely to result in a substantial increase in imports from the United States.
On the other hand, in response to Bangladesh’s offer, the United States has agreed to reduce the proposed reciprocal duty from 37 per cent to 19 per cent, to be applied in addition to the MFN rate. According to estimates by the Research and Policy Integration for Development, the imposition of a 20 per cent reciprocal tariff could reduce Bangladesh’s exports to the United States by approximately 14 per cent, equivalent to around US$ 1.25 billion.
Taken together, these developments suggest that implementation of the Agreement is likely to lead to a significant reduction in Bangladesh’s bilateral trade surplus with the United States, which was at around US$ 6.5 billion in 2024—and could potentially move the balance towards equilibrium, if not into surplus in favour of the United States.
While the revised notion of reciprocity is reflected through the aforementioned provisions, the Agreement also includes several additional commitments by Bangladesh that do not fall within this notion of reciprocity. These include commitments to adopt complementary restrictive measures in response to similar actions by the United States, align Bangladesh’s export control regime with that of the United States for sensitive technologies and goods, refrain from entering into free trade agreements with non-market economies, avoid procurement of nuclear reactors, fuel rods, or uranium from countries deemed contrary to U.S. interests, and regulate the operations of third-country-owned companies in Bangladesh where such operations may affect U.S. export interests in third markets and so on.
To conclude, the Agreement extends beyond its stated objective of promoting reciprocal trade and, at the same time, contains provisions that may be difficult to implement while maintaining Bangladesh’s obligations under the WTO framework. Furthermore, the recent withdrawal of the Executive Order of April 2, 2025 raises additional concerns regarding the feasibility of implementing an agreement that continues to refer to that instrument. Taken together, these factors pose significant legal, policy, and operational challenges for Bangladesh.
Dr. Mostafa Abid Khan, Component Manager-1, Support to Sustainable Graduation Project (SSGP), Economic Relations Division, Ministry of Finance,
and former Member of Bangladesh
Trade and Tariff Commission