Haven’t seen such a crisis in 40 years: AK Azad’s disappointment in export sector

Staff Correspondent

AK Azad, one of the country’s leading business leaders and Managing Director (MD) of Ha-Meem Group, has said that he has never seen such a deep crisis in the export sector in his 40 years of business life.

He expressed this concern at a roundtable discussion titled ‘US counter-tariffs: Which way is Bangladesh going’ organized at the Sonargaon Hotel in the capital on Sunday, July 20. Prominent economists, businessmen and researchers of the country participated in it.

AK Azad said, “We businessmen have brought this sector to a respectable position. But now we are disappointed and angry.” He shared his experience of a recent meeting with a big international brand.

The brand’s head office told him that they had tried to understand the position of the Bangladesh government through their own government. According to them, Bangladesh’s position was weak and good results were not expected. He expressed deep disappointment on hearing this.

Current crisis in the export sector

According to AK Azad, the US’s announcement of counter-tariffs has emerged as a major threat to the export sector. He mentioned that a buyer of an international brand has informed him whether he will be able to bear 35 percent of his $80 million export costs if the new tariffs are imposed from August 1. This could put his profit of $1.37 million at risk, challenging the stability of the business.

Threat to Bangladesh’s export trade

The ready-made garment industry, known as the backbone of Bangladesh’s economy, is the second largest exporter in the world. The total export value in the 2022-23 fiscal year was $55.56 billion, of which 81.81 percent came from the garment sector. However, the sector’s major weakness is its 90 percent dependence on the US and European Union markets. Garment exports to the US fell by about 25 percent in 2023, reflecting the impact of global competition and tariff policies.

The US’s announcement of a 35 percent counter-tariff, which could take effect from August 1, could deeply impact Bangladesh’s $8 billion exports. With 17 percent of its exports currently dependent on the US, the tariff hike could dampen consumer demand and reduce export earnings.

Economists have warned that Bangladesh’s economic growth could fall below 5 percent if market diversification and anti-tariff diplomatic steps are not taken.

The way to the future

AK Azad has advised the interim government to begin negotiations on a bilateral trade agreement and tariff reductions with the United States.

“We need to deal with this crisis by hiring lobbyists. The government needs to be proactive, otherwise our export sector will face disaster,” he said.

Economists have suggested that it is important to expand exports to alternative markets such as India, Russia, and African countries, which will help overcome current dependence.