Washington: The United States and Bangladesh on Monday announced a new trade agreement aimed at easing tariffs on Bangladeshi goods, particularly in the critical garment and textile sector, which is the backbone of Bangladesh’s export economy.
Under the deal, the administration of US President Donald Trump will reduce so-called “reciprocal” tariffs on Bangladeshi products from 20 percent to 19 percent, according to a joint statement released by the White House.
The reciprocal tariffs were introduced last year as part of Trump’s broader strategy to address trade imbalances and what Washington considers unfair trade practices. Initially, the US had imposed tariffs of 37 percent on Bangladeshi goods before lowering them to 20 percent in August.
Duty-Free Access for Select Textile and Apparel Products
As part of the new agreement, Washington committed to establishing a mechanism that would allow certain textile and apparel products from Bangladesh to receive a zero reciprocal tariff rate.
This preferential treatment will apply to limited volumes of imports and will be linked to the quantity of US textile exports to Bangladesh, including US-produced cotton and man-made fiber inputs.
The United States will also identify additional products beyond textiles that could qualify for zero-percent reciprocal tariffs, potentially expanding the scope of duty-free trade.
Boost for Bangladesh’s Garment Sector
Textile and garment production accounts for around 80 percent of Bangladesh’s exports, making the sector vital for the country’s economy. The industry has been working to recover after being severely affected by the student-led revolution that toppled the government in 2024.
The agreement was signed on Monday and will become operational once both countries issue formal notifications, according to a statement by Muhammad Yunus, head of Bangladesh’s interim government.
Bangladesh’s National Security Adviser Khalilur Rahman said the tariff exemptions for apparel made using US inputs would provide a “substantial added impetus” to the country’s garments sector.
Trade Figures and US Brands Involved
Bangladesh exported about $8.4 billion worth of goods to the United States in 2024, while importing $2.2 billion worth of US goods, according to the Bangladesh Bank and the National Board of Revenue.
Several major US clothing brands source products from Bangladesh, including Fruit of the Loom, Levi Strauss, and VF Corp, which owns popular brands such as Vans, Timberland, and The North Face.