Economic policies during the Trump administration: Upcoming Challenges and opportunities for Bangladesh

Although President Donald J. Trump's most recent policies and initiatives have surprised the majority of developing nations, the USA ended its foreign aid. It withdrew from the World Health Organisation, which it had held the majority of membership. On January 20, 2020, the newly elected president of the United States signed several executive orders to facilitate American Supreme and us taxpayer-funded foreign aid funding. The Trump administration is reinvesting in tariff policy and applying at least 25% of tariffs to Canada. China is also considering doing so with its European allies. It is now theorized that these moves could have a significant impact on Bangladesh, a landslide in the latter part of an authoritarian brigand who almost wrecked Bangladesh's economy when he was supplanted earlier this year. The provisional government of Bangladesh must now tackle these challenges.

Exports of manufactured garments to Bangladesh increased 7.23 percent to $38.48 billion and $35.89 billion- another dimension of the importance of the US markets. The RMG export total is $46.09 billion for the FY 2022-23, which ranked as the best RMG export in Bangladesh's history. Besides, Bangladesh earns foreign income from the export of jute products, fish, and leather goods. New tariffs imposed by President Donald Trump threaten to have a similar unintended consequence for this country unless some other rules are implemented. Bangladesh is a developing country and is keen to get the GSP+ facility. If this opportunity is not seized, the export of Bangladeshi products to the US market will be prevented. In addition, according to a recent survey published by Bangladesh Bank, another primary source from which Bangladesh receives remittances is the United States, with an estimated amount of $1.4 billion or more. President Donald Trump being pro-nationalist stamped all over with this approach; he touches on the fact that the giving out of visas may just as well be hard work to obtain; some individuals will find it difficult or face negative as a whole, deportation of foreigners is bound to have a significant effect on the flow of money from the United States. The decision made by Donald Trump’s administration can also affect United Nation’s project fundings in Bangladesh as US constitute a major share of UN budget including UNHRC.

One of the outstanding accomplishments of the Trump administration is the end of all USAID funding worldwide. The suspension significantly reversed USAID's long-standing relationship with the organization in Bangladesh. The US allocated $490 million in development aid for Bangladesh and US$ 202.25 million for the Development Objective Grant Objective. Aside from stalling the ongoing governmental reform process in the development sector, this decision led to thousands of jobs being lost by those working on USAID-funded programs. This leaves a critical problem for Bangladesh, which the interim government must address under Dr. Muhammad Yunus. But the assurance that USAID has not stalled the initiatives related to the Rohingya Camps in Bangladesh is welcome news. They have committed to $121 million in foreign aid for this community in Bangladesh. Dated December 1940, Dr. Muhammad Yunus thanked US President Donald J. Trump for his relief. However, the very question is how will we face the impending adversities brought by the United States' far-right foreign and money-making policies, and what diplomacy will we adopt? Building those initiatives above upon the data to October 2023, The United States provided Bangladesh with millions of doses of Pfizer and Moderna vaccines through USAID. Moreover, the vaccines provided by the United States were a massive relief for Bangladesh during the Covid-19 pandemic. At the same time, the United States also offered refrigerators to store the vaccines.

First, an enhanced bilateral commercial and trade relationship with the United States is a significant opportunity for Bangladesh to take a more holistic view. The United States actively pursued Foreign Direct Investments (FDI)s from Bangladesh, which is now poised to transform itself in the days leading to the fall of Sheikh Hasina. Secondly, Bangladesh has a non-binding LNG treaty to import 5 million metric tonnes of liquefied natural gas a year, with the United States signed just at the beginning of October 2024. This week, the United States signed its first significant treaty during the Trump Administration. LLC, a US-based principal agent in Louisiana, brokered the deal with Mr. Ashik Chowdhury, Executive Director of Bangladesh Investment and Development Authority (BIDA). This may be the first step of an investment partnership between the United States and Bangladesh.

On October 21, 2024, the government of Bangladesh appointed its ambassador to the United States. Mr. Mushfiqul Fazal Ansarey, a distinguished journalist with access to the US Department of State briefing Bangladesh, should identify the right partners and appoint trusted and capable individuals focused on establishing strong trade ties with the United States. However, some speculate that Bangladesh's pivot toward China could be a reaction to America's belligerent foreign policy. China, which has invested a total of $23 billion in Bangladesh, has shown considerable interest in working with the interim government headed by Dr. Muhammad Yunus. They are among the most significant stakeholders in the nation." There is also a geopolitical angle since such a treaty on bilateral energy security is planned for execution soon with the United States by Bangladesh. As a developing country, Bangladesh needs to make GSP+ privilege its priority in 2026 and turn around to work with the USA, fabricate another arrangement, have balanced diplomatic relations, and involve US stakeholders in building up mutually beneficial ties between the USA and Bangladesh. Although USAID funding is suspended until renewed, Bangladesh can recapture US funding to broaden its development efforts. However, political analysts and foreign policymakers are sceptical about the path that the new actions of the US president will take now.

Michael Kugelman is a prominent American foreign policy writer and currently serves as the Director for South Asia Institute of the Woodrow Wilson Centre in Washington, DC. He argued that he could see a significant shift toward more development-oriented relationships, with a focus on foreign aid and support. This money was extremely generous to the Biden administration; however, the Trump administration expects substantial financial incentives. What achievement can the United States expect from these bilateral cooperation agreements? Kugelman writes that the relationship can be further privatized for the economic benefit of both the United States and Bangladesh.

Since independence, the United States has been one of the foremost partners in our development efforts, sponsoring Bangladesh in a wide array of programs. The responsibility for reshaping foreign policy to redound to the joint benefit of the two parties lies with the current interim administration and the upcoming elected government. On the contrary, the Bangladeshi diaspora community in the USA could significantly affect Shea's engagement with the Bangladeshi government and the US authorities, eventually ensuring many opportunities for retaining US funding for Bangladesh. In addition, it will allow these two countries to reset their economic goals.

Written By: Jaidul Karim Iram

Jaidul Karim Iram, has completed his graduation and post-graduation from the Department of International Relations, University of Dhaka. He has also worked as a Junior Executive/Young Professional in an NGO in the Research and Innovation department, participated in several MUN competitions in national levels. Jaidul has also been engaged with several voluntary activities, participated in two major international conferences abroad during his university tenure and worked as a youth advocate for human rights in Bangladesh. He is currently working as an “Executive Officer” at the People’s University of Bangladesh. Apart from that, Jaidul Karim Iram has taken part in several training programs and received certifications from reputed institutions. 

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