US and Bangladesh Seal Trade Deal: Tariffs Drop to 19% with Zero Exemptions Ahead
The US lowers tariffs on Bangladesh to 19% and grants zero duty on select textiles.
The United States and Bangladesh have reached a new trade agreement that marginally lowers US tariffs on Bangladeshi goods and opens the door for duty-free treatment on select textile and apparel products. The deal, announced on Monday, reduces Washington’s so-called “reciprocal” tariff on Bangladeshi exports from 20 percent to 19 percent, according to a joint statement released by the White House.
The reciprocal tariffs were introduced by former US President Donald Trump last year as part of a broader strategy to address trade imbalances and practices Washington viewed as unfair. Bangladesh was initially hit with a steep 37 percent tariff under this policy, before the rate was cut to 20 percent in August. The latest reduction represents a further, though modest, easing of trade restrictions.
A key component of the agreement is the US commitment to establish a mechanism allowing certain Bangladeshi textile and apparel exports to qualify for a zero reciprocal tariff. Under this framework, specific volumes of garments may receive preferential access to the US market, provided they are produced using American inputs such as US-grown cotton or man-made fibers.
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US officials also said they would identify additional non-textile products that could eventually qualify for zero-percent reciprocal tariffs. The agreement will become operational once both sides complete formal notification procedures. Bangladesh’s interim government chief, Muhammad Yunus, confirmed the signing of the deal in a statement posted on social media.
Textiles and garments account for roughly 80 percent of Bangladesh’s exports, making the sector central to the country’s economy. The industry has been in recovery mode following political upheaval in 2024, when a student-led movement toppled the government. National Security Adviser Khalilur Rahman said the expected tariff exemptions would provide “substantial added impetus” to the garments sector.
Trade data highlights the imbalance the agreement seeks to address. Bangladesh exported about $8.4 billion worth of goods to the United States in 2024, while importing $2.2 billion from the US. Major American apparel brands sourcing from Bangladesh include Fruit of the Loom, Levi Strauss, and VF Corp, whose portfolio includes Vans, Timberland, and The North Face.
