Bangladesh has achieved a significant breakthrough in international trade, securing a reduced 19 per cent tariff with the United States under a newly signed trade agreement. The deal provides duty-free access for select ready-made garments made with US-supplied cotton and synthetic fibres, offering a major boost to the country’s largest export sector.
Interim government chief Muhammad Yunus, known for his pro-US stance, confirmed the development, noting that the agreement came after nine months of negotiations starting in April 2025. “Washington has committed to establishing a mechanism for certain textile and apparel goods from Bangladesh using US-produced cotton and man-made fibre to receive zero reciprocal tariff in the US market,” Yunus stated in a post on X.
Signed in Washington by Commerce Adviser Sheikh Bashir Uddin and US Trade Representative Jamieson Greer, the agreement also includes provisions beyond textiles. Bangladesh will import US wheat, soybeans, and LNG, while agreeing to comply with US-mandated intellectual property standards. The deal further covers refraining from tariffs on e-commerce goods and supporting US proposals to reform the World Trade Organisation.
Commerce Secretary Mahbubur Rahman highlighted that Bangladesh’s top export earners—garments made from cotton and synthetic fibres imported from the US—would now enjoy zero reciprocal duty under the new deal. Analysts say this is timely relief for the RMG sector, which accounts for over 80 per cent of Bangladesh’s export revenue, employs nearly 4 million workers (mostly women), and contributes approximately 10 per cent to the country’s GDP.
Bangladesh had previously secured a tariff reduction from 37 per cent to 20 per cent in August 2025, and policymakers initially hoped for a further cut to 15 per cent. While the new 19 per cent rate falls short of that target, it aligns with tariffs applied to Bangladesh’s regional competitors such as Pakistan, Cambodia, and Indonesia, while Vietnam receives a 20 per cent reciprocal tariff.
The trade deal coincides with Bangladesh’s purchase of 25 aircraft from US aerospace giant Boeing, valued at an estimated Tk 30,000–35,000 crore, reflecting broader efforts to foster economic cooperation with the US. Observers note that recent US trade agreements with India, including a tariff cut from 50 to 18 per cent, may have influenced Washington’s decision on Bangladesh. Commerce Secretary Rahman suggested that geopolitical considerations could be a factor in the timing and terms of the agreement.
The deal comes just ahead of Bangladesh’s February 12 general elections, which are expected to transition the country from the 18-month Yunus-led interim government following the July Uprising and the fall of Sheikh Hasina’s Awami League government.
Bangladesh’s RMG sector, employing nearly 4 million workers and contributing 10 per cent of GDP, stands to benefit significantly from the reduced tariffs. Analysts believe the agreement strengthens Bangladesh’s trade relations with the US while securing crucial market access for its top export commodities. The new deal also aligns Bangladesh with global competitors, maintaining its competitive edge in the region while supporting broader economic and geopolitical strategies.