US-Bangladesh Trade Agreement: US cuts tariffs on Bangladeshi exports to 19%, boosting the garment sector, securing duty-free access and strengthening trade ties.
Bangladeshi garments on display ahead of new US trade agreement, offering duty-free access for select textiles (Photo: X)
US-Bangladesh Trade Deal: The United States agreed to lower tariffs on exports of Bangladeshi goods to 19% as part of a new trade agreement and this move is considered significant for Bangladesh’s textile industry and economic stability as well. The agreement is also opening doors for duty-free trade for textiles and garments made from US materials, which is certainly an improvement in Bangladesh’s trade portfolio.
Bangladesh interim chief adviser Muhammad Yunus confirmed the deal on Monday, citing almost one year of negotiations with Washington. Washington's stance began with tariffs as high as 37% on Bangladeshi products back in April, then was whittled down to 20% by August 2025 and has now been revised to 19%. The final agreement was inked by Commerce Adviser Sheikh Bashir Uddin, National Security Adviser Khalilur Rahman and US Trade Representative Ambassador Jamieson Greer.
Under this agreement, clothing made from materials produced within US soil would enjoy duty-free access back into the US, creating an opportunity for Bangladesh to gain better traction in that industry. The agreement also commits both countries to resolving non-tariff issues, which have long plagued exports and increased costs.
This industry generates over 80% of Bangladesh's export earnings and supports four million workers, mostly female and accounts for 10% of the GDP. Industry leaders believe reduction of tariffs can shield local factories from rising production costs, fuel costs and exchange rate fluctuations, making them survive in the local market with the US remaining in the top position as buyers.
The announcement comes after the United States and India recently sealed a trade deal, lowering tariffs from 50% to 18%. Bangladesh also sees an opportunity to grow its position in the global textile market, considering other neighboring countries are also taking advantage of trade benefits.
The trade agreement comes at a time when Bangladesh is going through a politically challenging time and the country has been operating under an interim government since the resignation of its previous Prime Minister, Sheikh Hasina, in 2024. There has been a recent outbreak of violence among youths from different parties with more than 40 people injured in a clash. Therefore, in such a politically tense atmosphere, it is crucial for the government to demonstrate its stability in terms of the economy, particularly in its trade policies.
The US-Bangladesh trade agreement reduces tariffs on Bangladeshi goods to 19% when they come into the US and also allows duty-free entry of garments if they use American-sourced materials. This helps the ready-made garment (RMG) industry to remain competitive in the US market, maintain employment for four million workers and support Bangladesh's position in the global textile supply chain.
