Bangladesh Gets Major Trade Boost from the U.S.: Tariffs Slashed, Garments Set for Duty-Free Access
Bangladesh’s economy has received a much-needed shot of confidence as the United States and Bangladesh finalize a new bilateral trade agreement that significantly eases tariff pressure on Bangladeshi exports. Under the deal, U.S. reciprocal tariffs on Bangladeshi goods have been reduced to 19 percent, offering immediate relief to exporters.
Even more importantly for Dhaka, the U.S. has pledged duty-free access for select Bangladeshi garments—provided those products are manufactured using American raw materials. Announcing the development on X, Yunus said that Washington has committed to creating a zero-tariff pathway for specific Bangladeshi apparel made with U.S. inputs.
Nine Months of Tough Negotiations Pay Off
This tariff relief is the result of over nine months of intense negotiations between the two sides. Initially, in April, the U.S. had proposed tariffs as high as 37 percent on Bangladeshi exports—an alarming prospect for Dhaka. After prolonged discussions, Bangladesh secured a breakthrough in August last year, bringing the rate down to around 20 percent, which has now been further refined to 19 percent under the final agreement.
Yunus described the deal as a major step toward protecting jobs and strengthening Bangladesh’s position in the global textile supply chain, particularly at a time when export-driven economies are under pressure worldwide.
Who Signed the Deal?
According to an official statement from Dhaka, the agreement was signed by:
- Sheikh Bashir Uddin, Commerce Adviser of Bangladesh
- Khalilur Rahman, Bangladesh’s National Security Adviser
Representing the United States was U.S. Trade Representative Ambassador Jamieson Greer.
Greer praised Yunus and the Bangladeshi negotiating team for their persistence and commitment, calling the agreement a positive step forward. The statement added that the deal would strengthen Bangladesh’s standing within U.S. trade policy frameworks.
The White House also confirmed that both countries are committed to addressing non-tariff barriers in Bangladesh, signaling deeper trade cooperation beyond just tariff reductions.
Lifeline for Bangladesh’s Garment Industry
The agreement comes as critical relief for Bangladesh’s ready-made garment (RMG) sector, the backbone of the country’s economy. The sector:
- Accounts for over 80 percent of total export earnings
- Employs around 4 million workers, most of them women from rural and low-income backgrounds
- Contributes roughly 10 percent to the country’s GDP
Industry leaders believe that lower U.S. tariffs will help Bangladeshi manufacturers remain competitive in the American market, which is one of their largest export destinations.
In recent years, the sector has been under strain due to rising production costs, high energy prices, currency volatility, and increasingly strict compliance standards imposed by international buyers. The new tariff structure could ease some of that pressure and stabilize factory operations.
A Regional Trade Context
Earlier this month, U.S. President Donald Trump announced a trade agreement with India, under which tariffs were cut from 50 percent to 18 percent. Against that backdrop, Bangladesh’s revised tariff rate keeps it broadly competitive in the South Asian export landscape.
Trade Deal Amid Political Uncertainty
The timing of the agreement is politically sensitive. Bangladesh is heading into national elections on Thursday, following a turbulent period under an interim government since August 2024, when former Prime Minister Sheikh Hasina fled to India, where she remains.
Tensions have been rising ahead of the vote. Just days before the election, fresh violence erupted, with clashes between local party workers leaving more than 40 people injured, including women.
Against this backdrop, the interim government appears eager to project economic stability and international confidence, with trade policy playing a central role. The U.S.–Bangladesh trade deal, therefore, is not just an economic win—it is also a strategic signal aimed at reassuring investors, workers, and voters during a highly uncertain moment for the country.