U.S. lowers tariffs on Bangladesh by 1 per cent, no reciprocal tax on certain products

The United States and Bangladesh on Monday announced a trade agreement to reduce US tariffs on Bangladeshi goods, offering relief to the world’s second-largest garment exporter and signalling deeper cooperation on textiles and apparel.

Under the deal, the US will cut its so-called “reciprocal” tariffs on Bangladeshi products from 20 percent to 19 percent, according to a joint statement released by the White House. These reciprocal duties were introduced by the Donald Trump administration last year to address what Washington described as trade imbalances and unfair practices.

Zero Duty Mechanism for Textiles

A key feature of the agreement is Washington’s commitment to establish a mechanism allowing certain textile and apparel products from Bangladesh to receive a zero reciprocal tariff rate. The preferential treatment will apply to limited volumes of imports and will be linked to Bangladesh’s use of US-produced inputs, including cotton and man-made fibres.
Beyond textiles, the US will also identify other Bangladeshi products that could qualify for zero-percent reciprocal tariffs.

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Boost for Garment Sector

Textiles and garments account for nearly 80 percent of Bangladesh’s exports, a sector that has been rebuilding after disruptions caused by the student-led uprising that toppled the government in 2024. Bangladesh’s interim leader Muhammad Yunus said the agreement would become operational once both sides issue formal notifications.

National Security Adviser Khalilur Rahman said the expected exemptions would provide a significant boost to the garment industry.