Bangladesh secures reduced 19% US tariff, exemption for some apparel made with US material

The deal includes significant market access for US goods and commitments on labor rights and environmental protections, following nine months of negotiations.

Bangladesh has secured a lower 19 per cent US tariff under a trade agreement signed by the two countries on Monday, with exemptions for certain textiles and clothing produced using US materials.

Muhammad Yunus, chief adviser to Bangladesh’s interim government, said Washington had “committed to creating a mechanism” that would allow select Bangladeshi textile and apparel goods made with US-produced cotton and man-made fiber to enter the US market at zero reciprocal tariff.

The White House said Bangladesh has agreed to grant significant preferential market access to US industrial and agricultural products, including chemicals, medical devices, machinery, motor vehicles and parts, soy products, dairy items, meat, poultry, tree nuts and fruit.

It added that Bangladesh will also relax non-tariff barriers by accepting US vehicle safety and emissions standards, acknowledging US Food and Drug Administration certifications, and lifting import restrictions on remanufactured goods.

BANGLADESH TO BOOST US PURCHASES

The two sides also highlighted recent and planned commercial deals, including aircraft procurement, approximately $3.5 billion in purchases of US agricultural goods, and an estimated $15 billion in US energy product imports over 15 years.

According to the 32-page US-Bangladesh agreement released by the Office of the US Trade Representative, Biman Bangladesh Airlines plans to buy 14 Boeing aircraft, with options for additional orders. The airline had first announced a Boeing purchase last July while negotiations were underway.

Bangladesh will also purchase an unspecified quantity of US military equipment and curb purchases from certain countries.

The South Asian, low-wage economy also committed to uphold internationally recognized labor rights and strengthen environmental safeguards.

Yunus said the deal followed nine months of talks that began in April last year.

In August, Bangladesh secured a cut in US tariffs on its exports to 20 per cent, down from the 37 per cent initially proposed by Washington, offering relief to the country’s clothing exporters.

INDIA STILL NEGOTIATING

Bangladesh’s tariff rate is slightly higher than the 18 per cent rate for imports from India agreed last week by the Trump administration, though that arrangement still requires further negotiations before it is finalized.

US Trade Representative Jamieson Greer said Bangladesh is the first South Asian country to complete a reciprocal trade agreement with the US, calling it “a meaningful step forward in opening markets, addressing trade barriers, and creating new opportunities for American exporters.”

The ready-made garments sector remains the backbone of Bangladesh’s economy, accounting for more than 80 per cent of export earnings, employing about 4 million workers, and contributing approximately 10 per cent to gross domestic product.

Bangladesh goes to the polls on Thursday to choose new leadership after being run by an interim government since August 2024, when former Prime Minister Sheikh Hasina fled to India, where she remains.

Under tariff schedules released by the USTR, Bangladesh will reduce high duties to zero on several agricultural and food products, including poultry, pork, seafood, rice, corn and cereal grains, once the agreement takes effect.

Other tariffs will be cut by 50 per cent at the offset and then phased down to zero over five or 10 years, depending on the product. For instance, the current 53.6 per cent duty on almonds will fall to zero over a decade, while the same rate on four-stroke auto rickshaw engines will be eliminated within five years.

Most US tariffs will be set at a flat 19 per cent, but Bangladeshi-made pharmaceutical ingredients and aircraft parts will be exempt from duties, in line with treatment expanded to other countries that have signed tariff-reduction deals with President Donald Trump’s administration.

The United States and Bangladesh on Monday reached an Agreement on Reciprocal Trade as both sides seek to deepen their “bilateral economic relationship”. Under the agreement, Bangladesh’s exports to the American market will face a 19% tariff, slightly below the earlier rate of 20%.

The signing brought together US trade representative Jamieson Greer and Bangladesh’s advisor overseeing commerce, textiles and jute, and civil aviation and tourism, Sheikh Bashir Uddin. Bangladesh commerce secretary Mahbubur Rahman and assistant US trade representative Brendan Lynch were also present.

Bangladesh has secured a reduced 19 percent tariff on exports to the US under a new trade agreement. The US, initially, had proposed tariffs of up to 37 per cent on Bangladeshi exports in April.

The United States has cut reciprocal tariffs on Bangladeshi imports to 19 per cent under a new bilateral trade agreement, offering duty-free access to selected textile and clothing goods made with US-produced materials, Bangladesh interim chief adviser Muhammad Yunus announced on Monday.

“Washington has committed to creating a pathway for selected Bangladeshi garments made with US materials to receive zero tariff access,” Yunus wrote on

According to an official declaration issued by Dhanka, the agreement was signed on the Bangladesh side by Commerce Adviser Sheikh Bashir Uddin and National Security Adviser Khalilur Rahman, and on the US side by Ambassador Jamieson Greer, the US Trade Representative.

The current tariff relief follows a series of talks with Washington over nine months. The US, initially, had proposed tariffs up to 37 per cent on Bangladeshi exports in April. After intensive talks, Dhaka secured a reduction in August last year, bringing the rate down to 20 per cent.

Greer praised Yunus and the negotiating team for their efforts in concluding the deal.

“This agreement will strengthen Bangladesh’s position in US trade policy,” he said, as quoted in the statement.

The White House confirmed that both countries were also committed to tackling non-tariff barriers in Bangladesh.

The readymade garments sector is the backbone of Bangladesh’s economy, accounting for more than 80 percent of total export earnings. It employs around four million workers, mostly women from rural and low-income backgrounds, and contributes about 10 per cent to gross domestic product.

Industry leaders said the lower tariff rate could help Bangladeshi producers stay competitive in the US market, which remains one of their largest export destinations.

Many factories have fought in recent years due to rising production costs, higher energy prices, currency volatility and tougher compliance requirements imposed by international buyers.

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