April 15, 2026
By Ashu Mann
The February 2026 U.S.–Bangladesh Agreement on Reciprocal Trade is being sold as a commercial bargain, but its most dangerous provisions are not about tariffs at all. They are about power. Buried inside the language of “economic and national security” is a framework that pulls Bangladesh steadily into Washington’s strategic orbit. Articles 3.1–3.3 already narrow Dhaka’s policy space on digital taxation and customs duties on electronic transmissions. But Articles 4.1–4.3 go much further: they push Bangladesh towards alignment with American sanctions, export controls, investment scrutiny, and defence preferences. This is not free trade. It is conditional sovereignty.
The bluntest example is Article 4.1. It states that if the United States adopts a border measure or other trade action it considers relevant to its own economic or national security, Bangladesh, after notification and consultations, “shall adopt or maintain a complementary restrictive measure” in support of the U.S. step. Article 4.2 then requires Bangladesh to harmonise its export-control regime with U.S. controls on sensitive technologies and goods, and to ensure Bangladeshi companies do not “backfill or undermine” those controls. It also calls on Bangladesh to help restrict transactions that would violate U.S. sanctions or export controls if they had occurred in the United States or involved a U.S. person. The footnote makes clear the reference point: Washington’s Entity List and OFAC sanctions lists.
That caveat about acting “consistent with” domestic law does not rescue the clause. In practical terms, the agreement invites Bangladesh to internalise American blacklists as a working principle of commerce. A sovereign state should decide its own foreign-policy posture according to its own interests, regional realities, and legal standards. Instead, this text pressures Dhaka to treat Washington’s sanctions architecture as the outer boundary of acceptable trade. That means the U.S. is not merely protecting itself; it is exporting its coercive regime into another country’s regulatory bloodstream. Once that logic is accepted, Bangladesh stops behaving like an independent actor and starts behaving like an enforcement adjunct of U.S. strategy.
The diplomatic cost is obvious. Any meaningful partnership with countries that fall foul of U.S. strategic preferences becomes riskier, more politically expensive, and potentially punishable. Article 3.2 allows the United States to terminate the agreement and reimpose tariffs if Bangladesh enters a new digital trade agreement with a country that “jeopardizes essential U.S. interests.” Article 4.3 repeats the same pattern for a bilateral free-trade or preferential economic agreement with a “non-market country” that Washington believes undermines the deal. This is not market openness; it is geopolitical gatekeeping. Bangladesh is told, in effect, that future relationships with China, or with any state disfavoured by Washington, may trigger economic retaliation.
The security intrusions are even starker. Article 4.3 says Bangladesh shall not purchase nuclear reactors, fuel rods, or enriched uranium from a country that “jeopardizes essential U.S. interests,” except under narrow exceptions. The same article says the United States shall work with Bangladesh to “streamline and enhance defense trade.” Then Annex III, Section 6 adds another revealing commitment: Bangladesh shall endeavour to increase purchases of U.S. military equipment and limit military equipment purchases from certain countries. When a trade agreement begins dictating the political acceptability of strategic suppliers and nudging arms purchases towards one power, it ceases to be a trade pact in the ordinary sense. It becomes an instrument of alignment.
Washington’s own public messaging confirms the direction of travel. The White House said Bangladesh committed to cooperate on export controls, share information on inbound investment, and strengthen economic and national-security alignment. It also highlighted expected commercial deals in aircraft, agriculture, and energy. The agreement was tied to anticipated purchases exceeding $18 billion, including energy, agriculture, and military products, while reducing U.S. tariffs on Bangladeshi exports to 19 percent and creating a zero-tariff mechanism for some textiles made with U.S. inputs. The structure is unmistakable: tariff relief is offered as the carrot, while sanctions alignment, sourcing pressure, and strategic dependence become the stick.
Supporters will claim Bangladesh is merely being pragmatic in a harsh trading environment. That defence misses the point. Pragmatism is negotiating flexible terms while retaining strategic autonomy. This agreement does the opposite. It binds Bangladesh’s room for manoeuvre to U.S. threat perceptions, U.S. sanctions lists, U.S. judgments about “non-market” partners, and U.S.-favoured procurement patterns. A country that cannot freely calibrate its ties with Russia, China, or any other major actor without fear of tariff snapback is not exercising full sovereignty. It is operating under managed permission.
Bangladesh deserves trade, not tutelage. It deserves access to markets without being dragooned into another state’s blacklist diplomacy. A fair agreement would expand commerce while respecting Dhaka’s right to choose its partners, suppliers, and strategic posture. The February 2026 agreement does not meet that test. It asks Bangladesh to mortgage foreign-policy independence in exchange for limited tariff relief and promised purchases. That is a poor bargain for any sovereign nation. And for Bangladesh, it is a warning that the price of doing business with Washington may now include obedience itself.
By Ashu Mann
The February 2026 U.S.–Bangladesh Agreement on Reciprocal Trade is being sold as a commercial bargain, but its most dangerous provisions are not about tariffs at all. They are about power. Buried inside the language of “economic and national security” is a framework that pulls Bangladesh steadily into Washington’s strategic orbit. Articles 3.1–3.3 already narrow Dhaka’s policy space on digital taxation and customs duties on electronic transmissions. But Articles 4.1–4.3 go much further: they push Bangladesh towards alignment with American sanctions, export controls, investment scrutiny, and defence preferences. This is not free trade. It is conditional sovereignty.
The bluntest example is Article 4.1. It states that if the United States adopts a border measure or other trade action it considers relevant to its own economic or national security, Bangladesh, after notification and consultations, “shall adopt or maintain a complementary restrictive measure” in support of the U.S. step. Article 4.2 then requires Bangladesh to harmonise its export-control regime with U.S. controls on sensitive technologies and goods, and to ensure Bangladeshi companies do not “backfill or undermine” those controls. It also calls on Bangladesh to help restrict transactions that would violate U.S. sanctions or export controls if they had occurred in the United States or involved a U.S. person. The footnote makes clear the reference point: Washington’s Entity List and OFAC sanctions lists.
That caveat about acting “consistent with” domestic law does not rescue the clause. In practical terms, the agreement invites Bangladesh to internalise American blacklists as a working principle of commerce. A sovereign state should decide its own foreign-policy posture according to its own interests, regional realities, and legal standards. Instead, this text pressures Dhaka to treat Washington’s sanctions architecture as the outer boundary of acceptable trade. That means the U.S. is not merely protecting itself; it is exporting its coercive regime into another country’s regulatory bloodstream. Once that logic is accepted, Bangladesh stops behaving like an independent actor and starts behaving like an enforcement adjunct of U.S. strategy.
The diplomatic cost is obvious. Any meaningful partnership with countries that fall foul of U.S. strategic preferences becomes riskier, more politically expensive, and potentially punishable. Article 3.2 allows the United States to terminate the agreement and reimpose tariffs if Bangladesh enters a new digital trade agreement with a country that “jeopardizes essential U.S. interests.” Article 4.3 repeats the same pattern for a bilateral free-trade or preferential economic agreement with a “non-market country” that Washington believes undermines the deal. This is not market openness; it is geopolitical gatekeeping. Bangladesh is told, in effect, that future relationships with China, or with any state disfavoured by Washington, may trigger economic retaliation.
The security intrusions are even starker. Article 4.3 says Bangladesh shall not purchase nuclear reactors, fuel rods, or enriched uranium from a country that “jeopardizes essential U.S. interests,” except under narrow exceptions. The same article says the United States shall work with Bangladesh to “streamline and enhance defense trade.” Then Annex III, Section 6 adds another revealing commitment: Bangladesh shall endeavour to increase purchases of U.S. military equipment and limit military equipment purchases from certain countries. When a trade agreement begins dictating the political acceptability of strategic suppliers and nudging arms purchases towards one power, it ceases to be a trade pact in the ordinary sense. It becomes an instrument of alignment.
Washington’s own public messaging confirms the direction of travel. The White House said Bangladesh committed to cooperate on export controls, share information on inbound investment, and strengthen economic and national-security alignment. It also highlighted expected commercial deals in aircraft, agriculture, and energy. The agreement was tied to anticipated purchases exceeding $18 billion, including energy, agriculture, and military products, while reducing U.S. tariffs on Bangladeshi exports to 19 percent and creating a zero-tariff mechanism for some textiles made with U.S. inputs. The structure is unmistakable: tariff relief is offered as the carrot, while sanctions alignment, sourcing pressure, and strategic dependence become the stick.
Supporters will claim Bangladesh is merely being pragmatic in a harsh trading environment. That defence misses the point. Pragmatism is negotiating flexible terms while retaining strategic autonomy. This agreement does the opposite. It binds Bangladesh’s room for manoeuvre to U.S. threat perceptions, U.S. sanctions lists, U.S. judgments about “non-market” partners, and U.S.-favoured procurement patterns. A country that cannot freely calibrate its ties with Russia, China, or any other major actor without fear of tariff snapback is not exercising full sovereignty. It is operating under managed permission.
Bangladesh deserves trade, not tutelage. It deserves access to markets without being dragooned into another state’s blacklist diplomacy. A fair agreement would expand commerce while respecting Dhaka’s right to choose its partners, suppliers, and strategic posture. The February 2026 agreement does not meet that test. It asks Bangladesh to mortgage foreign-policy independence in exchange for limited tariff relief and promised purchases. That is a poor bargain for any sovereign nation. And for Bangladesh, it is a warning that the price of doing business with Washington may now include obedience itself.
Guarding Against Excessive Economic Dependence – Analysis
April 15, 2026
By Ashu Mann
The BNP government’s decision to review the recent trade agreement is best understood as a conscious attempt to prevent Bangladesh from sliding into structural overdependence on a single external power, particularly the United States. In doing so, it has signalled that economic policymaking in Dhaka will not be reduced to rubber-stamping deals that expand Washington’s leverage while narrowing Bangladesh’s strategic choices.
Asymmetry and strategic vulnerability
The starting point is the hard reality that the United States is already Bangladesh’s single largest export market, accounting for around 18 per cent of total export earnings and remaining the top destination for ready-made garments. In 2025 alone, Bangladesh exported goods worth about 8.69 billion dollars to the United States, running a sizeable trade surplus but also deepening exposure to fluctuations in US demand and policy. This concentration of export earnings in one market gives Washington a structural lever over Bangladesh’s growth, employment in the garment sector, and foreign exchange stability.
When any one country becomes indispensable for market access, technology, or finance, the relationship ceases to be a normal partnership and starts resembling a hierarchy. Over-reliance on a single buyer country for jobs and foreign exchange can quickly morph into a strategic vulnerability, because even limited trade disruptions or targeted sanctions can create outsized domestic political and economic shocks.
The BNP’s scepticism towards the proposed agreement reflects an awareness that codifying more such asymmetric dependence, especially in areas like critical inputs, standards, or digital rules would lock Bangladesh into a subordinate position that is difficult to reverse.
The US record of instrumentalising trade
Bangladesh’s experience with the United States on labour linked trade conditionalities is a telling warning. In 2013, Washington suspended Bangladesh’s eligibility under the Generalized System of Preferences (GSP), citing worker rights and safety concerns after the Rana Plaza tragedy, and tied reinstatement to a unilateral US “Action Plan”.
Yet garments, which constitute the majority of Bangladesh’s export basket, were never covered by GSP in the first place; only about 1 per cent of exports to the United States actually enjoyed those preferences. The economic impact of the suspension was modest, but the political signalling was sharp and deliberately humiliating, with Dhaka pressured to constantly demonstrate “progress” on a checklist drafted in Washington.
This episode underlines a broader pattern: the United States is willing to weaponise access to its market and trade privileges to force internal policy changes in smaller states, often with highly selective and inconsistent application of human rights rhetoric. Scholars of economic coercion have shown that such linkages can successfully reshape policy behaviour in vulnerable countries, not because the measures are economically devastating in themselves, but because leaders fear the reputational costs and the possibility of escalation to more painful sanctions.
For Bangladesh, granting Washington even deeper, treaty-backed influence over critical economic inputs would be an unforced error, given this proven track record of instrumentalising trade.
Sovereignty, conditionalities, and strategic autonomy
The BNP government’s objections on sovereignty and mandatory procurement should therefore be read as more than routine bargaining language. Clauses that effectively hard wire American suppliers into Bangladesh’s procurement chains, or require alignment with US regulatory preferences, would give Washington enduring leverage over infrastructure, energy, and emerging technologies in Bangladesh.
Once such provisions are locked into binding treaty commitments, rolling them back is politically costly and legally complex, especially for a developing country that cannot afford reputational damage in global markets.
For a state like Bangladesh, which must navigate not only US power but also the competing pulls of China, India, and other regional players, autonomy in economic decision-making is a core security interest, not a luxury.
The ability to say “no” to political conditionalities, to diversify sources of technology and finance, and to recalibrate supply chains over time is essential if Dhaka is to avoid becoming a mere arena where larger powers trade influence. The BNP’s refusal to sign a lopsided deal is thus a rare assertion of strategic agency in an environment where Washington often expects compliance as the default.
Bangladesh’s trade profile already shows that an alternative path is both possible and desirable. China and India together account for the largest share of Bangladesh’s imports, particularly in machinery, raw materials, and consumer goods, while the United States, the European Union, and the United Kingdom dominate as export destinations. This pattern can be leveraged to build a consciously diversified portfolio of economic partnerships, where no single country, whether the US, China, or any other, can unilaterally cripple Bangladesh’s economy by turning off the tap of trade, investment, or finance.
A diversification doctrine would mean deepening ties with regional forums and middle power coalitions, from ASEAN and the Gulf economies to African and Latin American partners, alongside a balanced approach towards both Washington and Beijing.
It would also involve pushing for more value addition at home, so that Bangladesh is not locked permanently into the lowest rungs of garment assembly, and can instead bargain for better terms in multiple markets. Such a strategy enhances resilience and bargaining power, because external partners know that Bangladesh is not trapped in a single corridor of dependence.
Ashu Mann
Ashu Mann is an Associate Fellow at the Centre for Land Warfare Studies. He was awarded the Vice Chief of the Army Staff Commendation card on Army Day 2025. He is pursuing a PhD from Amity University, Noida, in Defence and Strategic Studies. His research focuses include the India-China territorial dispute, great power rivalry, and Chinese foreign policy.
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