When BRI Meets Conditional Trade: Bangladesh's Dual Dependency Trap in the Age of U.S. - China Competition

Abstract

This paper examines Bangladesh's evolving trade strategy at the intersection of competing geoeconomic pressures from the United States and China, arguing that the country functions as a "strategic swing economy" whose hedging capacity is increasingly constrained by structural asymmetries. Through analysis of the 2026 U.S. -Bangladesh Reciprocal Trade Agreement and Bangladesh's deepening infrastructure integration with China's Belt and Road Initiative (BRI), the study reveals a central tension: while U.S. engagement offers enhanced market access conditional on labor, environmental, and digital governance reforms, Chinese cooperation provides flexible development financing and infrastructure investment that generate long-term dependency without explicit governance conditionalities. The findings contribute to Belt and Road discourse in three critical ways. First, they demonstrate that BRI- induced infrastructure integration does not automatically expand strategic autonomy for recipient countries; rather, when combined with parallel trade alignment toward Western markets, it can produce fragmented economic systems and dual dependency traps. Second, the paper challenges binary narratives of BRI as either neocolonial domination or mutually beneficial development, revealing instead how connectivity-driven development coexists uneasily with competing regulatory regimes, creating compound constraints on policy sovereignty. Third, by introducing the "strategic swing economy" concept, the analysis shows that mid-sized developing nations actively shape their engagement with China, yet face diminishing maneuvering space as trade agreements increasingly embed strategic alignment. These findings suggest that sustainable BRI cooperation requires frameworks that explicitly reconcile infrastructure financing with policy autonomy, enabling recipient countries to transition from passive rule-takers to active participants in shaping global economic governance norms.