Bangladesh has reached an agreement with the United States that lowers tariffs on its exports to 19 percent, a reduction that offers targeted relief to the country’s export-driven economy while tying future gains to the use of American raw materials.
The deal, finalised in Washington and announced on February 9, applies most significantly to Bangladesh’s ready-made garment sector, the backbone of its export earnings. Under the arrangement, garments manufactured using cotton and man-made fibres imported from the United States will be eligible for zero reciprocal duty in the U.S. market, according to Bangladesh’s Commerce Secretary, Mahbubur Rahman.
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In a public statement, interim chief Muhammad Yunus said Washington had committed to establishing a formal mechanism to implement the exemption, following nine months of negotiations that began in April last year.
Garments at the Center of the Deal
For Bangladesh, the stakes are high. The ready-made garment (RMG) industry accounts for more than 80 percent of the country’s export earnings, employs roughly four million workers — the majority of them women — and contributes about a tenth of national gross domestic product.
Commerce ministry officials said the agreement was signed by Commerce Adviser Sheikh Bashir Uddin and U.S. Trade Representative Jamieson Greer. Beyond textiles, the deal includes provisions that deepen Bangladesh’s economic alignment with Washington, including commitments to import U.S. wheat, soybeans and liquefied natural gas, refrain from imposing tariffs on e-commerce, and comply with U.S.-mandated intellectual property standards.
The agreement also signals Bangladesh’s support for U.S. proposals on reforming the World Trade Organisation, reflecting a broader strategic accommodation in exchange for improved market access.
Competition, Geopolitics and Tradeoffs
The tariff reduction places Bangladesh roughly in line with regional competitors. Vietnam, a key rival in global apparel exports, received a 20 percent reciprocal tariff, while Pakistan, Cambodia and Indonesia have been set at 19 percent.
Commerce officials in Dhaka suggested that recent trade developments elsewhere may have influenced Washington’s decision. Earlier this month, the United States lowered tariffs on Indian exports to 18 percent, following negotiations that included pressure on New Delhi to curb Russian oil purchases and reduce trade barriers.
Mr. Rahman said the U.S.-India agreement may have had a “geopolitical dimension” that shaped the Bangladesh outcome, particularly as Washington recalibrates trade relationships across South and Southeast Asia.
The United States remains Bangladesh’s largest export destination, according to the Export Promotion Bureau, making even marginal tariff changes economically significant for manufacturers operating on thin margins.
Timing and Political Undercurrents
The announcement comes at a politically sensitive moment. Bangladesh is heading into a general election on February 12, expected to end the 18-month interim administration led by Mr. Yunus, which assumed power after the collapse of the Awami League government following widespread student-led protests known as the July Uprising.
In recent months, Dhaka has taken visible steps to ease trade frictions with Washington, including agreeing to purchase 25 aircraft from Boeing, a deal estimated at 30,000–35,000 crore taka. Analysts view such moves as part of a broader effort to stabilise external economic relations amid political transition.
While Bangladeshi policymakers had initially hoped to bring U.S. tariffs down to 15 percent, business leaders say the current deal still provides critical breathing room for exporters facing slowing global demand, rising input costs and intense competition.
For now, the agreement reflects a trade-off: partial tariff relief in exchange for deeper integration with U.S. supply chains — and a reminder that in today’s trade landscape, market access is increasingly shaped by geopolitics as much as by price or productivity.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
