The United States and Bangladesh announced an agreement on Monday to reduce US tariffs on Bangladeshi goods, while Washington also pledged to work towards duty exemptions for selected textile and apparel products, the White House has announced.
Under the deal, the administration of President Donald Trump will lower US reciprocal tariffs on Bangladeshi products from 20 percent to 19 percent, according to a joint statement from the White House.
The reciprocal duties were introduced by Trump last year to counter trade imbalances or practices the United States considered unfair. Bangladesh was initially hit with a tariff rate of 37 percent as part of a broader sweep targeting dozens of economies. That rate was later reduced to 20 percent in August.
Key aspects of US-Bangladesh trade deal:
- Textiles and garments account for about 80 percent of Bangladesh’s exports. The sector has been recovering after severe disruption caused by a student led revolution that brought down the government in 2024.
- As part of the new agreement, Washington has committed to setting up a mechanism that would allow certain textile and apparel goods from Bangladesh to qualify for a zero reciprocal tariff rate. This would permit specific volumes of these products to receive preferential treatment.
- The eligible volume will be linked to the amount of US textile exports to Bangladesh, including US-produced cotton and man-made fibre inputs.
- Beyond textiles, the United States will also identify other products that could qualify for a zero per cent reciprocal tariff.
The agreement was signed on Monday and will take effect once both countries issue formal notifications, according to a statement on social media by Muhammad Yunus, head of Bangladesh’s interim government. Bangladesh’s National Security Adviser, Khalilur Rahman, said the anticipated tariff exemptions for garments made using US inputs would provide a significant boost to the country’s apparel sector.
Bangladesh exported about USD 8.4 billion worth of goods to the United States in 2024, while importing $2.2 billion from the US, according to figures from the Bangladesh Bank and the National Board of Revenue. US clothing brands sourcing products from Bangladesh include Fruit of the Loom, Levi Strauss and VF Corp, whose labels include Vans, Timberland and The North Face.
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