US, Bangladesh Strike Trade Deal Cutting Tariffs, Expanding Market Access

The United States and Bangladesh on Monday, February 9, signed a reciprocal trade agreement that reduces US tariffs on Bangladeshi goods from 20 percent to 19 percent, offers duty-free access for selected exports, and expands market access for a broad range of products from both countries.

Under the United States–Bangladesh Agreement on Reciprocal Trade, certain Bangladeshi textile and apparel exports can enter the US at zero tariffs if they use US-produced textile inputs, such as cotton and man-made fibers, according to a joint statement.

Bangladesh’s apparel industry, which accounts for over 80 percent of the country’s exports and employs around four million people, is a cornerstone of its economy. The country is the world’s second-largest clothing exporter after China, the BBC reported.

In return, Bangladesh will grant preferential market access to US industrial and agricultural goods, including chemicals, medical devices, machinery, motor vehicles and parts, ICT equipment, energy products, soy and dairy products, beef, poultry, nuts, and fruits.

Both sides also agreed to address non-tariff barriers that affect trade and investment. Bangladesh will accept vehicles built to US federal safety and emissions standards, recognize US Food and Drug Administration certificates for medical devices and pharmaceuticals, and remove import restrictions on US remanufactured goods.

“Bangladesh commits to permit the free transfer of data across trusted borders; support the adoption of a permanent moratorium on customs duties on electronic transmissions at the World Trade Organization; follow science and risk-based processes to allow the import of safe U.S. food and agricultural goods; remove barriers in the insurance market; digitalize its customs procedures; and adopt and implement good regulatory practices,” read one of the key terms of the agreement.

On labor and environmental standards, Bangladesh pledged to protect internationally recognized labor rights, ban imports of goods produced by forced labor, strengthen labor law enforcement, and maintain high environmental protection standards.

The agreement further covers intellectual property protection, geographical indications, anti-corruption enforcement, and cooperation on supply chain resilience, export controls, and combating unfair trade practices.

The US indicated it may support investment financing in Bangladesh through institutions such as the Export-Import Bank and the US International Development Finance Corporation, subject to eligibility.

Both countries highlighted recent and planned commercial deals, including aircraft procurement, roughly $3.5 billion in US agricultural purchases, and energy imports projected at $15 billion over 15 years.

The BBC reported that Bangladesh had been engaged in prolonged negotiations with the White House following President Donald Trump’s sweeping tariffs on global trading partners last April.

The two nations said they would complete domestic procedures to finalize and implement the agreement.

The agreement was reached just days before Bangladesh’s general elections on Thursday, February 12. The country has been under an interim government since August 2024, after the student protests culminated in an ouster of then Prime Minister Sheikh Hasina.

The newly announced US tariff cut brings Bangladesh close to the level of regional competitor India, which currently faces an 18 percent US tariff.