US cuts Bangladesh tariffs to 19%, gives Dhaka edge over India in textiles
Duty-free access for select garments using US inputs boosts Bangladesh’s apparel sector, sharpening its competitive edge over Indian exporters in the US market
Bangladesh has secured a sharp reduction in reciprocal tariffs imposed by the Trump administration on its exports to the United States under a new bilateral trade agreement, bringing the duties down to 19 per cent.
Under the deal, Bangladesh will also gain duty-free access to select textile and apparel products manufactured using US-origin materials, a move that significantly enhances Dhaka’s competitiveness in the crucial US garments market and gives it a clear edge over rivals such as India, which does not enjoy similar preferential access.
The development, announced on Monday (February 9), follows nine months of intense negotiations between Dhaka and Washington. The US had initially proposed tariffs of up to 37 per cent on Bangladeshi goods in April, before lowering them to 20 per cent in August last year after sustained diplomatic engagement.
What Muhammad Yunus said
”The US will further reduce reciprocal tariff to 19%, which was originally set at 37% and later reduced to 20% in August last year. In addition, the US committed to establishing a mechanism for certain textile and apparel goods from Bangladesh using US produced cotton and man-made fiber to receive zero reciprocal tariff in US market,” stated the Chief Advisor to the interim government in Bangladesh Muhammad Yunus in a post on X.
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"The reduction of reciprocal tariff will grant further advantage to our exporters, while zero reciprocal tariff on specific textile and apparel exports from Bangladesh using US inputs will give substantial added impetus to our garments sector", said NSA Rahman who was Bangladesh's chief negotiator.
US representative lauds deal
The release further stated that an 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 agreement was approved by the Council of Advisers on Monday and will be operational once notifications are issued by the two sides,” stated the release. "This agreement will align Bangladesh with US trade policy," said Greer.
Boost for garments sector
The trade deal, announced just days ahead of Bangladesh’s general elections on February 12, provides a major boost to the country’s garments sector, which generates over 80% of export earnings and contributes roughly 10% to GDP. The sector employs around 4 million workers, most of them women from rural and low-income backgrounds, making it a crucial part of the country’s economy and social structure.
Analysts said the agreement, which offers zero tariffs on select textile and apparel products made with US-origin materials, significantly strengthens Bangladesh’s competitiveness in the US market. This preferential access gives Bangladeshi exporters a clear edge over rivals such as India, which does not enjoy similar benefits. The deal is expected to improve profit margins for manufacturers, increase exports, and reinforce Bangladesh’s position in global apparel trade.
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Bangladesh exported $8.4 billion worth of goods to the US in 2024, while imports from the US stood at $2.2 billion, according to statistics from the Bangladesh Bank and the National Board of Revenue. US clothing companies sourcing products from Bangladesh include major brands like Fruit of the Loom, Levi Strauss, and VF Corp, whose portfolio includes Vans, Timberland, and The North Face.