Bangladesh Secures Tariff Relief in Strategic Trade Deal with US

Picture Credit: Apparel Views

Bangladesh has negotiated a partial tariff reprieve from the United States, easing pressure on its crucial apparel sector. Under a newly announced agreement, Washington will reduce tariffs on Bangladeshi goods from 20% to 19% and grant duty-free access to selected clothing and textile products made using American cotton and synthetic materials. The move offers Dhaka targeted relief at a time when global trade tensions continue to weigh on export driven economies.

The apparel industry remains the backbone of Bangladesh’s economy, contributing more than 80% of total export earnings and employing around four million workers. As the world’s second largest garment exporter after China, the country depends heavily on access to Western markets. The tariff adjustments come after prolonged negotiations triggered by sweeping trade measures imposed by former President Donald Trump last year, which initially hit Bangladesh with duties as high as 37%.

In return for the concessions, Bangladesh has agreed to expand market access for a broad range of American products. These include agricultural goods such as soy and meat, along with chemicals, medical equipment, automobile parts and other industrial items. Dhaka will also align more closely with US food safety, drug regulation, and vehicle emission standards, smoothing the path for American exporters seeking entry into the South Asian market.

Beyond trade terms, the agreement includes commitments from Bangladesh to strengthen labour rights protections and enhance environmental safeguards, issues that have long drawn scrutiny in its garment sector. The White House described the deal as providing “unprecedented access” for both sides, linking economic cooperation with regulatory and governance improvements.

The revised tariff rate places Bangladesh nearly on par with regional competitor India, which faces an 18% US levy after initially being subjected to higher duties. With both countries competing aggressively in garments, footwear and agricultural exports, even a marginal tariff shift can influence global sourcing decisions. As Bangladesh heads into general elections this week under an interim government, the agreement offers a timely boost to its export outlook and broader economic stability.