Bangladesh Navigates US–China Trade Balance Under New Leadership
Bangladesh is facing mounting structural challenges as it attempts to balance economic ties with the United States and China under the leadership of new Prime Minister Tarique Rahman, according to a recent Nikkei Asia analysis.
The report suggests Dhaka is entering a delicate phase in its foreign economic policy, as Washington and Beijing compete for influence in the South Asian nation — both of which remain crucial partners for Bangladesh’s trade, manufacturing and infrastructure development.
The analysis highlights that ongoing trade negotiations with the United States have introduced strict provisions that could shape Bangladesh’s policy choices. While the US is emphasising market access, security cooperation and regulatory alignment, China continues to position itself as a long-term partner through infrastructure financing, industrial integration and defence cooperation.
The situation has become more complex following developments related to US tariff policies. The report notes that tariff adjustments — including reductions from higher levels — are tied to compliance with trade provisions, meaning Bangladesh must carefully manage its commitments to avoid potential economic repercussions.
One of the central concerns raised is the possibility that tariffs on Bangladeshi exports could rise significantly if Dhaka fails to meet agreed conditions. The report indicates that tariff rates, currently lowered, could revert to much higher levels if compliance requirements are not fulfilled.
Bangladesh may also need to align with certain US export controls and sanctions frameworks. In cases where Washington introduces new economic or security-related trade measures, Dhaka is expected to consult and potentially adopt corresponding policies, adding another layer of strategic complexity.
At the same time, China’s economic footprint in Bangladesh continues to expand. Chinese foreign direct investment stock has reached roughly $3 billion, reflecting Beijing’s growing role in infrastructure, manufacturing supply chains and industrial development.
China has also provided zero-tariff market access for Bangladeshi exports under initiatives aimed at supporting least developed economies, strengthening bilateral trade links.
Policy experts in Bangladesh have pointed to the structural difficulty of navigating great-power rivalry. Faiz Sobhan, senior research director at the Bangladesh Enterprise Institute, said that managing relationships in an increasingly polarised global environment will be particularly challenging for countries with export-driven growth models.
Analysts note that Bangladesh’s dependence on the US market for garment exports makes trade policy decisions especially sensitive. Any disruption to market access could directly affect employment, manufacturing output and foreign exchange earnings.
The contrasting strengths of the two global powers illustrate Bangladesh’s strategic dilemma. The United States provides a major export destination and security partnership, while China plays a deeper role in the country’s production ecosystem, supplying machinery, raw materials and industrial inputs that sustain manufacturing.
The report suggests that China’s integration into Bangladesh’s industrial base gives it structural influence beyond trade alone. Many of the goods that support Bangladesh’s garment sector — the backbone of its economy — originate from Chinese supply chains.
This dual dependence increases the difficulty of aligning closely with either side without risking economic consequences. Similar challenges are emerging across developing economies that rely on both Western markets and Chinese industrial networks.
Bangladesh’s trade strategy under Prime Minister Tarique Rahman reflects a broader global trend in which middle-income and developing economies must balance competing economic partnerships. The evolving US trade framework and China’s continued investment highlight how economic diplomacy is becoming increasingly complex.
As geopolitical rivalry intensifies, Dhaka’s ability to maintain flexibility while protecting export growth will be critical. The outcome could influence not only Bangladesh’s economic trajectory but also how other emerging economies navigate similar pressures.
Our Final Thoughts
Bangladesh’s balancing act between the United States and China illustrates the shifting realities of global trade politics. Economic partnerships are no longer purely commercial; they increasingly carry regulatory, strategic and geopolitical implications. For Bangladesh, maintaining access to Western markets while preserving Chinese industrial support will require careful policy coordination and diplomatic agility. The country’s experience reflects a wider challenge facing export-driven economies that depend on multiple power centres. How Dhaka manages this equilibrium may become a case study for other nations navigating the intersection of globalisation and geopolitical competition.