US lowers tariffs on Bangladesh goods, offers duty-free access to some garments

Bangladesh has secured a reduced 19 per cent reciprocal tariff on exports to the United States under a new bilateral trade agreement on Monday. Interim government chief adviser Muhammad Yunus said Washington had also agreed to allow selected Bangladeshi garments made with US materials to enter the American market without duties.

"Washington has committed to creating a pathway for selected Bangladeshi garments made with US materials to receive zero tariff access," Yunus wrote on X.

Bangladesh’s current tariff relief follows a series of negotiations with Washington over months. The US, initially, had proposed tariffs of up to 37 per cent on Bangladeshi exports in April. After intensive talks, Dhaka secured a reduction in August last year, bringing the rate down to 20 per cent.

Yunus described the agreement as a major step towards protecting jobs and strengthening Bangladesh’s position in the global textile supply chain.

According to an official statement, the agreement was signed on the Bangladesh side by Commerce Adviser Sheikh Bashir Uddin and Security Adviser Khalilur Rahman, and on the US side by Ambassador Jamieson Greer, the US Trade Representative.

Greer praised Yunus and the negotiating team for their efforts in concluding the agreement.

“This agreement will strengthen Bangladesh’s position in US trade policy,” he said, as quoted in the statement.

US authorities have not yet issued a separate public response to the deal.

CRUCIAL RELIEF FOR EXPORT SECTOR

The readymade garments sector is the backbone of Bangladesh’s economy, accounting for more than 80 per cent of total export earnings. It employs around four million workers, most of them women from rural and low-income backgrounds, and contributes about 10 per cent to gross domestic product.

Industry leaders said the lower tariff rate could help Bangladeshi manufacturers stay competitive in the US market, which remains one of their largest export destinations.

Many factories have struggled in recent years due to rising production costs, higher energy prices, currency volatility and tougher compliance requirements imposed by international buyers.

Earlier this month, US President Donald Trump announced a trade deal with India that reduced tariffs to 18 per cent from 50 per cent.

ELECTIONS AMID RISING TENSIONS

The trade agreement comes at a delicate moment. Bangladesh goes to the polls on Thursday after being under an interim administration since August 2024, when former prime minister Sheikh Hasina fled to India, where she remains. Fresh violence erupted ahead of the elections, with more than 40 people, including women, injured in clashes between local party workers late on Wednesday night.

The interim government has sought to demonstrate economic stability and credibility ahead of the election, with trade policy playing a central role.

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With inputs from agencies