Bangladesh and US Sign Trade Deal; Export Tariffs Cut to 19%

Bangladesh has signed a landmark bilateral trade agreement with the United States, successfully reducing the reciprocal tariff on its exports from 20% to 19%.

The deal was signed virtually on Monday night (9 February) by Commerce Adviser Sk Bashir Uddin and US Trade Representative Jamieson Greer. This follows nine months of high-stakes negotiations aimed at easing the trade burden imposed by the Trump administration last year.

Strategic Concessions and "Zero Duty" Access To secure this reduction and strengthen economic ties, Bangladesh has committed to several major trade and strategic measures: Boeing Aircraft Purchase: Bangladesh will buy 25 new aircraft from US-based Boeing, estimated to cost between Tk30,000 crore and Tk35,000 crore.

Zero Tariffs for Apparel: Bangladeshi garments made using imported US cotton or synthetic fibers will now enjoy zero reciprocal duty in the US market.

Increased Imports: Dhaka has agreed to import more wheat, cotton, soybean, and liquefied natural gas (LNG) from the United States to help balance the trade deficit.

Policy Commitments: Bangladesh pledged to uphold US-mandated intellectual property standards and refrain from taxing e-commerce.

Regional Competition The new 19% rate places Bangladesh in a competitive but challenging position among regional rivals. While it now holds an advantage over Vietnam (20%), it remains slightly behind India, which recently secured an 18% rate. Other countries like Pakistan, Cambodia, and Indonesia are also subject to the 19% tariff.

Commerce Secretary Mahbubur Rahman noted that while Bangladesh had initially hoped for a 15% rate, the US has not granted that level to any country in the region, likely due to complex geopolitical and trade considerations.

Despite the slight reduction, industry experts remain optimistic. Former WTO Cell Director General Md Hafizur Rahman stated that Bangladesh’s lower labor and production costs will help the nation remain highly competitive in the US apparel market, even at 19%.

The interim government is expected to hold a formal press conference tomorrow to provide further details on the agreement.