In a landmark agreement boosting bilateral trade, the United States has reduced tariffs on Bangladeshi goods to 19%, down from the prior 20% rate, under a new reciprocal deal signed yesterday. The pact, hailed as a "historically new level" of cooperation, offers duty-free access for certain apparel made with US materials while securing market openings for American agricultural products in Bangladesh.

Announced on February 9, the deal caps US duties at 19% across most Bangladeshi exports, with garments—the backbone of the nation's economy—poised for the biggest gains. Exporters using American cotton or synthetic fibers can now ship qualifying textiles tariff-free to the US, directly linking import volumes to duty exemptions.

Bangladesh reciprocates by eliminating tariffs immediately on US poultry, pork, seafood, rice, and corn. Duties on almonds, apples, and other goods will phase out over 5-10 years. Talks involved US Trade Representative Jamieson Greer and Bangladesh's Sheikh Bashir Uddin, with interim leader Muhammad Yunus praising the outcome amid ongoing economic recovery efforts. This follows President Trump's earlier 37% tariff hikes, later dialed back to 20% in mid-2025, providing much-needed stability for exporters still reeling from 2024's turmoil.

The ready-made garments industry, accounting for 80% of Bangladesh's US-bound exports and employing millions, expects a surge in competitiveness. "This gives substantial added impetus," said National Security Adviser Khalilur Rahman, noting cost savings from US-sourced inputs. Compared to India's recent 18% deal, Bangladesh's edge lies in lower wages, potentially capturing more market share from rivals like Vietnam. Factories may boost US cotton purchases, fostering deeper supply chain ties.

Beyond tariffs, Bangladesh pledges priority buys of US wheat, soybeans, and LNG, plus regulatory ease for e-commerce and support for WTO reforms favored by Washington. US firms gain from reduced barriers on machinery and medical equipment entering Bangladesh. As Trump administration officials emphasize "fair deals for American workers," this South Asia-first pact could inspire similar arrangements with neighbors. Official briefings are slated soon, with effects pending formal notifications.