Garments make up nearly 95 per cent of Bangladesh's exports to the US.
A pact with the US on reciprocal tariffs will be welcomed by whoever comes to power
Whatever the outcome on Thursday, Bangladesh is clearly at an inflection point
Three days ahead of the crucial national elections in Bangladesh, the interim government headed by Nobel laureate Muhammad Yunus is poised to sign a trade agreement with the United States. This is an unusual step so close to the elections and would normally have triggered a political storm.
But no one is complaining because the country’s flourishing garment industry that provides livelihood to a large majority of poorer Bangladeshis, has been hit by Trump’s 2025 tariffs. The deal is expected to be signed later this evening and tariffs on imports from Bangladesh will now be reduced from the current 20 per cent, announced in August, to 18 per cent. But more important is the fact that under the new agreement, garments exported from Bangladesh using US cotton yarn will be exempted from tariff. The quid-pro-quo is importing large quantities of US cotton to Bangladesh. Much of the details of the trade pact will be known only after details of the agreement are known. For now, an announcement is expected.
The agreement comes as campaigning comes to an end and will certainly not become a major election issue. A pact with the US on reciprocal tariffs will be welcomed by whoever comes to power after Thursday’s elections. Garments make up nearly 95 per cent of Bangladesh's exports to the US. If what the local newspapers are saying about the garment sector is correct, it will give Bangladesh a competitive edge in the US garment sector.
This will be the first election without the former ruling Awami League in the race. The party was banned following the Gen Z revolution that overthrew the 15-year rule of Sheikh Hasina, who as time passed had become more and more authoritarian. Students who were in the forefront of the movement against Sheikh Hasina, formed the National Citizens' Party (NCP) with the hope of carving out a party with a difference, unlike what traditional politicians offered. But the NCP has been unable to gather much momentum, though the party will certainly gain some seats.
Poll Permutations
Three hundred seats are up for grabs in the Jatiya Sansad, (Parliament) on Thursday. Many believe this will be a landmark election and a free and fair one at that.
The frontrunner at the moment is the Bangladesh Nationalist Party (BNP) of former prime minister Khaleda Zia, who came to power following the assassination of her husband the late president Ziaur Rahman. Khaleda Zia died recently but her son Tarique Rahman has returned from self-imposed exile in the UK to lead the BNP that heads a 10-party alliance. His main challenger is Jamaat-e-Islami, Bangladesh (JIB), which heads an 11-party alliance that includes the NCP. The Jamaat, once a part of the ruling alliance with the BNP was banned by the Hasina government. Apart from these two blocs, the Islami Andolan Bangladesh, which broke away from the JIB-led alliance, and the Jatiya Party, a longtime ally of Hasina’s Awami League, are contesting independently.
India is carefully watching the elections. New Delhi is comfortable with the BNP, known during Hasina’s tenure as an anti-India formation. But the BNP and India have mended fences since and would prefer to have them in power.
The Jamaat had been thoroughly marginalised during the last years of Sheikh Hasina’s rule, but has now made a dramatic comeback, giving the BNP a run for the money. Some analysts say that the Jamaat may even cause a major upset in the elections.
Historically Jamaat has not been a major electoral force in Bangladesh with its vote share never over 12 per cent. But now with the space created with the ban on the Awami League, the Jamaat profile has grown dramatically. The fact that Jamaat had not supported the country’s independence struggle and many of the leadership worked with the Pakistan army, had tarnished the party’s reputation. But with most of the senior leaders now out of the scene, many sentenced to death during Hasina’s term for crimes committed during the 1971 war, the stigma has eroded. For young Bangladeshis, the memory of the 1971 war is too far into history to make any impact.
Jamaat’s anti-India stand is appreciated by a large number of people who believe that New Delhi’s support had emboldened and enabled Sheikh Hasina to rule with an iron fist. These sections would rather have a religious party at the helm, to keep India at bay. The anti-Bangladeshi rhetoric of India’s ruling party, the constant baiting of Indian Muslims by BJP leaders and senior ministers during elections have antagonised most Bangladeshis. The conservative religious sections feel that the Jamaat would be in a better position to guard the country’s interests. The BNP, while it plays the religious card from time to time, is like the Awami League, a modern moderate Islamic party.
Whatever the outcome on Thursday, Bangladesh is clearly at an inflection point. The US trade deal, quietly stitched together under an interim government, signals continuity in economic priorities even as the political landscape is being radically reshaped.
The election will determine who gets to steward this new phase, whether a familiar BNP leadership seeking stability and repaired regional ties, or a resurgent Jamaat drawing strength from resentment and identity politics.
