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We need to be prepared for it. Here’s a brief description of the transformational forces unleashed by the trade war and what they may wrought in the future. The trade war between US and China is a reality now and may affect our country’s economy in significant ways. It was speculated that the trade war has the potential to affect global economy because the two countries involved are economic as well as industrial giants.
The trade war has already affected the Bangladeshi steel industry. Bangladesh is an importer of scrap metals and steel millers are now stocking up on scraps and refusing to sell as much as before due to Trump’s tariffs. Also, rod prices are on the rise due the tariffs and this increase in price is affecting the infrastructure projects by making them more expensive. Sudden drops in price of cotton may also affect our RMG sector.
So far, the trade war has not had a profound impact on our economy but we cannot ignore its possibilities. Although farfetched an idea, if Trump suddenly decides to impose a blanket tariff on RMG import, our economy may have to bear its brunt. On the other hand, US may also decide to buy more of clothes and shoes from countries like Bangladesh, India and Vietnam instead of China.
We need to be well prepared for any further shocks that feuds between other economies may bring and protect our trade sector by implementing appropriate monetary and fiscal policies. If there are areas where we can take advantage of, they too should be explored by our policy makers and authorities.