Bangladesh to buy 220,000 tons of US wheat to cool tariff tension

Bangladesh's government has approved the purchase of about 220,000 metric tons of wheat from the United States as part of efforts to cool trade tensions and reduce steep import tariffs imposed by President Donald Trump's administration, a Dhaka official said on Wednesday.

The purchase has been approved by Bangladesh under a government-to-government deal at $302.75 a ton, the food ministry official said. It will be supplied by a Singapore-based trading house.

Earlier in July Bangladesh signed a memorandum of understanding to import 700,000 tons of wheat annually from the United States over the next five years.

Bangladesh currently relies heavily on cheap imports from the Black Sea region for lower-cost wheat while importing smaller volumes of higher-grade grain from countries such as the United States and Canada for blending purposes.

Until the Trump administration's dismantling of USAID this spring, Bangladesh had received shipments of U.S. wheat and other food grains as donations.

Trump threatened Bangladesh with 35% tariffs on exports from August 1 if the country did not take measures to reduce a $6 billion trade imbalance with the United States.

The planned 700,000 ton wheat purchases will only slightly dent that deficit, but Brian Liedl, vice president of overseas operations at export promotion organisation U.S. Wheat Associates, said the deal has encouraged the group to search for other countries that might decide to buy U.S. grains as a way to avoid damaging tariffs.

Liedl said the trade group was looking to strike similar deals with other countries in Asia and in sub-Saharan Africa that had previously received donated U.S. wheat and other kinds of U.S. food assistance.

"We're looking to replace a lot of that demand with more direct, sustainably commercial business," Liedl said.

On July 27 Bangladesh also ordered 25 aircraft from Boeing and ramped up imports of other American goods.

A Bangladesh government delegation is in the United States for trade talks this week, officials in Dhaka said.