President Donald Trump’s second term in the White House will shape South Asia, including Bangladesh across multiple domains. President Trump’s pragmatic and transactional foreign policy will restructure the diplomatic stances of South Asian countries. Given Bangladesh’s geographical location in the Indo-Pacific region, with its recent mass uprising led interim government will face its own share of challenges and opportunities in the Trump 2.0 era. On the economic side, protectionist trade policies could pose a threat to the export-led economy of Bangladesh, particularly the ready-made garment (RMG) sector. Strategically, likelihood of the U.S. looking Dhaka through the lens of Delhi could make Bangladesh uncomfortable. Also, changes in the U.S. policies regarding climate could impact Bangladesh's climate agenda. Nevertheless, if Bangladesh can earn the confidence of the new administration, it may open new windows of opportunities as well. Bangladesh can attract the industries which would look for a new country to relocate from China. Evaluating these potential shifts is essential to understand the likely direction of the US-Bangladesh relationship and other neighboring countries in South Asia. To this end, this keynote is divided into four thematic categories covering geopolitics, security and defense, economy and climate change. The paper ends with recommendations for Bangladesh.

Geopolitics:

1. Indo-Pacific Strategy and QUAD: Strengthening U.S.-India Ties

Indo-Pacific strategy is a key component of Trump’s foreign policy, indicating a neo-continental confrontation with the People's Republic of  China (PRC). This strategy is expected to foster a far more profound engagement with India, a key partner of the US,  for the ‘Free and Open Indo-Pacific’.

​The  Quadrilateral Security Dialogue (QUAD), which includes the United States, India, Japan, and Australia, will remain the focal point of the strategy to advance stability and eliminate threats at sea. Under Trump, the QUAD is likely to enhance the frequency of joint military drills and technological cooperation to check Chinese aggression.

2. AUKUS: Expanding Military Presence

The AUKUS pact between the U.S., the UK, and Australia will help deepen U.S. military involvement in the Indo-Pacific. This is meant to threaten China into not dominating important maritime transit channels. But it could also have the flip side of inviting criticism from countries in the SAARC nations apprehensive at steps towards ‘militarization’

​As for the QUAD member India, AUKUS might bring extra security assurances, however, other South Asian countries like Bangladesh and Sri Lanka might still be wary because of their business with China.

​3. Countering China: A Hardline Approach

The second administration of President Trump could adopt an even harsher stance on China. Backing Taiwan and the hike in military assistance for them might trigger a provocation in the Indo-Pacific region. Proposing alternative infrastructure projects to counter Belt, Road Initiative (BRI). These harsh policies will shape South Asian politics mainly, through pressure on regional governments to stay away from China. For instance, a continued partnership between Pakistan and China could result in a breakdown of Pakistan’s partnership with Washington​.

​4. India’s Strategic Role

Once again, India is indeed predicted to become a partner for the U.S. under Trump due to mutual apprehensions regarding China. Prime Minister Narendra Modi’s latest visit to the U.S. and the subsequent joint statement indicated such a direction. QUAD and India's increased strategic partnership with the United States will help India to become stronger in the South Asian region but India’s strategic relation with Russia may face backlashes. Nevertheless, Trumps as transactional leader expressed unhappiness on tariff and non-tariff barriers on U.S. trade in the Indian market. Moreover, deportation of illegal Indian immigrants and unfair trade practices by India might become the focal points in the day ahead.

Bangladesh’s Implication:

1. Transactional Diplomacy and Reduced Soft Power:
• Trump's "America First" approach focuses more on transactional diplomacy than democracy and human rights promotion. Simultaneously, Trmup’s crusade on USAID risks U.S. soft power influence in Bangladesh​​.
• A decreased focus on nation-building efforts by the U.S. could impact support for democratic institutions and slow down reform agendas of the interim government​​. 

2. India’s Increased Role:
• With U.S. attention diverted, India might try to reassert its influence over Bangladesh. This could embolden pro-Indian factions within Bangladesh's political landscape.
• The India-U.S. partnership in the Indo-Pacific could pressure Bangladesh to align its policies more closely with New Delhi, complicating its efforts to maintain neutral foreign policy stances​​. However, it will mostly depend on the chemistry between President Trump and President Xi Jinping. If President Trump choose to avoid the trade war with China then Bangladesh shall get a favorable geopolitical landscape to navigate its foreign relations.
3. Concerns over Minority Rights:
• Trump's administration may raise concerns about minority rights and religious extremism in Bangladesh, viewing the country through an India-centric lens. This could lead to diplomatic tensions and external scrutiny of Bangladesh’s internal policies​​.

Security and Defense:

1. India can Play a Sizeable Part in the U.S. Defense Plan

Trump's second term is expected to further strengthen the Indo-US defense partnership. The United States is willing to become the major supplier of armaments for the Indian defense system.

Key Impacts:

·       Promoting arms exports to India as well as the supply of hi-tech equipment and weapons systems.

·       Coordinated Operations to boost naval security in the Indo-Pacific region.

·       Possible joining of efforts in missile defense affairs and exchange of information.

·       Controlling terrorism and focusing on groups that work from Pakistan.

2. Pakistan’s Challenges

The speculation of another Trump presidency could mean huge defense problems for Pakistan as the partnership between the U.S. and India is predicted to grow stronger in the subsequent years. Pakistan may have its military assistance diminished and face diplomatic pressure for counterterrorism.

Key Impacts:

·       Reduction in defense funding: Trump’s first term also experienced most of the relations with Pakistan put on hold and military aid cut off. It could go on like this, worsening the relations between the US and Pakistan on the defense front.

·       Increased diplomatic isolation: The Trump administration is likely to pressure on Pakistan for operations against terrorist organizations, specifically those threatening India.

·       Possible sync of American policy with India’s security perception may undermine Pakistan’s defense priorities.

3. China’s Role and American Reaction

The presidency of Donald Trump has predicted a high tone to China and this will influence South Asia‘s security defense programs. The U.S. will most assuredly seek to apply pressure on its allies in South Asia to join in efforts to challenge and contain China militarily and economically, mainly through defense agreements and strategic partnerships.

Key Impacts:

·       The U.S. could build more military bases in the area to checkmate China’s growing naval influence.

·       It will force the South Asian countries in general to side with the US in its strategic rivalry with China.

·       It may not be well seen Back in America, especially in the Trump administration, that Pakistan and China have good relations.

Bangladesh’s Implications

Opportunities:

1. Establishment of Strategic Partnership with the U.S in Defense Cooperation

Bangladesh has been a preferred beneficiary of Foreign Military Financing (FMF) and International Military Education and Training (IMET). The U.S. has also facilitated military equipment transfers, including:

·       Hamilton-class cutters for the Navy.

·       Mine Resistant Ambush Protected (MRAP) vehicles for peacekeeping operations

·       Annual training programs and combined exercises including the Combined Agile Response to Assist in Disasters (CARAT) as well as the Pacific Angel.

As of late, the U.S. has been very keen on signing official agreements with its partners such as GSOMIA (General Security of Military Information Agreement) and ACSA (Acquisition and Cross-Servicing Agreement). These agreements could pave the way for:

·       Efficient intelligence-sharing

·       Joint military operations

·       Advanced arms sales​

2. Partners in the Indo-Pacific

Bangladesh has a crucial geographic location in the Bay of Bengal that places this country amidst the greatest importance in Indio-Pacific politics. The country hosts key seaports with easy access to the open sea which transships approximately one-third of the world's seaborne cargo and half of the world’s container cargo​. The United States considers Bangladesh as a like-minded partner in preserving security at sea and a rule-based Indo-Pacific​. Under the Trump presidency the height of this partnership might expand.

Challenges:

1. Balancing U.S.-China Rivalry

Bangladesh has a strong defense cooperation with China which is the source of most of the types of equipment needed. The United States under Trump 2.0 is very likely to push Bangladesh to decrease its dependence on Chinese-sourced weapons and equipment and purchase U.S. origin weaponries which will be both expensive and incompatible with existing weapon platforms.  However, Bangladesh can shift to new weapon systems provided that these systems are coming within an affordable price.  Simultaneously managing relations with both the U.S. and China will necessarily be important for Bangladesh to sustain its strategic independence​.

Economy

1. Trade and Tariff Policies

A second Trump administration would likely continue its protectionist trade policies, imposing higher tariffs on imports and renegotiating trade agreements to favor U.S. interests. This can have significant consequences for Bangladesh’s export-driven economy, particularly the ready-made garment (RMG) sector, which heavily depends on the U.S. market.

• A 5% tariff increase on Bangladeshi exports to the U.S. could result in an annual loss of $412 million, impacting the country’s $6.89 billion export revenue from the U.S.​.
• Bangladesh’s reliance on the RMG sector makes it vulnerable to changes in U.S. trade policies, potentially reducing its global competitiveness​​.

2. Shifting Supply Chains

If the U.S.-China trade war continues it will drive the restructuring of global supply chains, offering opportunities for South Asian countries like Bangladesh to attract manufacturing investments as companies would seek alternatives to China.

• Vietnam has been a significant beneficiary of the trade war, attracting more FDI than Bangladesh in Trump’s first term. For Bangladesh to remain competitive, it must improve its infrastructure and logistics​.
• Bangladesh could benefit from supply chain diversification, but it needs to focus on upgrading its industrial zones and streamlining regulations to attract more investment.

3. Economic Partnerships

Trump’s bilateral trade approach may create opportunities for countries like India and Bangladesh to secure tailored trade deals.

• The ICT sector, pharmaceuticals, and agro-processing industries are emerging sectors where Bangladesh could seek FDI from the U.S., diversifying its economy beyond RMG​.
• However, Bangladesh's dependence on Chinese investments, particularly in infrastructure projects, could become a sticking point in U.S.-Bangladesh relations​​.

4. Remittances and Immigration Policies

The Trump administration’s strict immigration policies could affect remittance flows, which are crucial for Bangladesh’s economy.

• In 2023, Bangladesh received $511.96 million in remittances from the U.S., making up a significant portion of the country’s foreign exchange earnings​.
• Stricter visa policies and immigration reforms could reduce remittance inflows, impacting household incomes and consumption in Bangladesh​​.

5. Impact on Regional Cooperation

Trump’s America First approach and withdrawal from multilateral agreements could weaken regional trade bodies like SAARC and ASEAN, affecting South Asian economic integration.

• India’s growing influence in the QUAD could further marginalize smaller South Asian economies like Bangladesh, pushing them to seek alternative partnerships​​.

Climate Change

1. South Asia's Climate Vulnerabilities

South Asia is one of the most climate-vulnerable regions in the world, facing:

• Rising sea levels
• Increasing frequency of floods, cyclones, and droughts
• Air pollution and deforestation

Trump’s anti-climate policies could worsen these risks by promoting fossil fuel production and withdrawing from international climate commitments, such as the Paris Agreement​.

Key Concerns for South Asia:

• Increased Carbon Emissions: Trump's policies are projected to increase U.S. carbon emissions by 4 billion tons by 2030, worsening global climate change​.
• Reduced Climate Aid: The U.S. would likely reduce financial aid to developing countries for climate adaptation and disaster response. 

2. Specific Impacts on Bangladesh

Bangladesh is one of the most climate-vulnerable countries in the world, with frequent natural disasters like floods, cyclones, and rising sea levels​. Under a second Trump administration, Bangladesh would face increased challenges in securing climate financing and international cooperation.

Key Impacts on Bangladesh:

1. Reduced U.S. Support for Climate Initiatives
• The Trump administration would likely cut funding for international climate programs, reducing the financial support available to Bangladesh for disaster mitigation, adaptation, and renewable energy projects.
• Bangladesh heavily relies on global climate funds to achieve 40% renewable energy by 2041​.
2. Fossil Fuel Reliance
• Trump's policies favor oil and gas production, potentially encouraging South Asian countries, including Bangladesh, to delay their transition to renewable energy.
• This could lead to higher carbon emissions and environmental degradation in the region​​.
3. Impact on Renewable Energy Projects
• The U.S. under Trump could withdraw clean energy investments, making it harder for Bangladesh to develop solar, wind, and other renewable projects​.
• The repeal of the Inflation Reduction Act could slow down global progress in clean energy technologies, affecting Bangladesh's ability to source affordable clean energy solutions​.

Recommendations for Bangladesh:

To effectively navigate the challenges posed by a potential second Trump presidency, Bangladesh could consider the following recommendations based on insights from the provided documents:

1. Strengthen Economic Diversification

• Address Protectionist Policies: Trump’s administration has historically favored protectionism and transactional diplomacy. Bangladesh should diversify its export markets beyond the U.S. to mitigate risks, particularly in the Ready-Made Garment (RMG) sector.
• Leverage Strategic Advantages: Focus on attracting U.S. investments in infrastructure, renewable energy, and manufacturing to align with potential U.S. interests.

2. Proactive Climate Diplomacy

• With Trump’s stance on climate change leaning toward fossil fuel reliance and possible rollback of green policies, Bangladesh must intensify global advocacy for climate action, emphasizing its vulnerability to climate impacts.
• Strengthen collaborations with climate-conscious U.S. states, private sectors, and global institutions.

3. Navigate Geopolitical Dynamics

• Indo-Pacific Strategy: Bangladesh's strategic location in the Indo-Pacific makes it an essential player. The country should maintain a balanced relationship with both the U.S. and China while reinforcing its non-aligned stance in geopolitical conflicts.
• Defense Collaboration: Engage in defense dialogues focusing on maritime security and counterterrorism to align with U.S. Indo-Pacific priorities.

4. Reinforce Domestic Stability

• Maintain Political Neutrality: The Trump administration might deprioritize democracy and human rights in foreign policy. Bangladesh should internally focus on democratic consolidation to ensure stability and international credibility.
• Protect Minority Rights: Address U.S. concerns regarding minority rights to avoid diplomatic friction and improve bilateral ties.

5. Enhance Diplomatic Engagement

• Build bipartisan relationships with U.S. policymakers, think tanks and industry leaders to ensure Bangladesh's strategic interests are represented regardless of the U.S. administration.
• Emphasize shared goals such as counterterrorism, economic growth, and regional stability.

6. Adapt Trade Strategies

• Utilize Trump’s inclination for transactional diplomacy by negotiating trade deals that favor mutual economic benefits.
• Capitalize on any shifts in global supply chains arising from U.S.-China trade tensions to attract foreign direct investment.

Keynote Author: Md. Ataur Rahman Talukder. This keynote was presented at the IILD Policy Dialogue on "Trump 2.0: What it Means for South Asia?"