Bangladesh and the United States signed a landmark trade agreement on 9 February that lowers the standard tariffs on Bangladeshi exports upto 19%. Washington proposed this significant drop from 37%, following months of negotiations led by Muhammad Yunus, the head of Bangladesh’s interim government.
A major change in Bangladesh’s garment industry is the new “reciprocal” rule. Clothing made from US-produced cotton or man-made fibres can enter the US market with zero tariffs. Also, aircraft parts and pharmaceutical ingredients will be duty-free.
Bangladesh is granting access to American products in return and will provide easier market access for US agricultural goods, such as beef, soy, dairy, and industrial goods, including machinery and chemicals. Bangladesh has committed to significant purchases, including 14 Boeing aircraft and $15 billion in U.S. energy over the next 15 years.
To make trading smoother, Bangladesh is adopting American car safety standards and relying on the US FDA approvals for food and medicine. They also promised to protect workers better, care for the environment, and purchase U.S. military equipment.
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While India is still negotiating its own deal, proposed at an 18% tariff, Bangladesh is the first South Asian country to secure a complex agreement with the Trump administration. This deal provides relief for Bangladesh’s apparel sector, which accounts for 80% of its export earnings, just as the country prepares for national elections.
