US grants tariff relief to Bangladeshi garments in landmark trade deal

Bangladesh has woven a finely balanced trade accord with the United States, clinching long-sought tariff relief and targeted market access for its vital garments sector under a new agreement announced on Monday, the BBC reported.

The deal delivers a modest yet meaningful reduction in US tariffs on Bangladeshi exports — from 20 per cent to 19 per cent — along with exemptions for select clothing and textile products made using American cotton and man-made fibres. In exchange, Dhaka has agreed to open its markets more widely to US goods, signalling a renewed phase of economic engagement between the two countries, the BBC reported.

The agreement follows months of painstaking negotiations set in motion after US President Donald Trump imposed sweeping tariffs on global trading partners last April. For Bangladesh, whose economic fortunes are closely stitched to apparel manufacturing, the talks were a high-stakes effort to protect the backbone of its export economy.

In a joint statement, the White House said the pact would strengthen bilateral economic ties and provide “unprecedented access” to each other’s markets. Washington will not only lower its overall tariff rate on Bangladeshi goods but also allow select garments and textiles to enter the US duty-free, provided they are produced using raw materials sourced from the United States. The volume of such tariff-free exports will be calibrated to the scale of American textile shipments to Bangladesh.

The garments industry remains the lifeblood of Bangladesh’s economy. As the world’s second-largest exporter of clothing after China, the sector accounts for more than 80 per cent of the country’s export earnings and employs around four million workers.

In return for the tariff concessions, Bangladesh has committed to granting “significant preferential market access” to a wide range of American agricultural and industrial products. The White House said this would include greater access for US chemicals, medical devices, automobile components, soy products and meat.

Dhaka has also agreed to recognise American standards on food safety, pharmaceuticals, vehicle safety and emissions, measures intended to smooth the path for US goods entering the Bangladeshi market.

Beyond trade, the agreement carries broader undertakings. Bangladesh has pledged to uphold internationally recognised labour rights and to step up its environmental protection efforts. It has also reaffirmed commitments to purchase billions of dollars’ worth of US agricultural produce, aircraft and energy products.

The revised tariff regime places Bangladesh nearly on par with regional rival India, which currently faces an 18 per cent US levy. The two South Asian neighbours compete fiercely in exporting garments, footwear and agricultural goods to the American market.

India was initially hit with a 25 per cent tariff when the Trump administration rolled out its first round of reciprocal duties in April 2025. Bangladesh, by contrast, had been burdened with a much steeper 37 per cent rate, making the latest agreement a significant reprieve for Dhaka.