Bangladesh has secured exemptions for some clothes and textiles that are made with U.S.-produced materials, as part of a new agreement announced on Monday. As part of the deal, Washington will cut its tariffs on Bangladesh from 20% to 19%, in exchange for Dhaka to open its markets to a wider range of American goods.
The apparel industry forms the backbone of Bangladesh, which is the world's second-largest exporter of clothes after China. The South Asian country has been in long-drawn talks with the White House after President Donald Trump imposed sweeping tariffs on global trading partners in April last year.
The White House stated in a joint statement that the agreement will strengthen the countries' economic ties and offer both 'unprecedented access' to each market. The U.S. will lower its tariff rate on Bangladesh and will also identify certain clothing and textile goods from the country to enter the U.S. free of tariffs. Goods included are those produced with American cotton and man-made textiles, the volume of which will depend on U.S. textile exports to Bangladesh.
The clothing sector accounts for more than 80% of Bangladesh's total export revenue and employs around four million workers. In exchange, Bangladesh has agreed to provide 'significant preferential market access' for American agricultural and industrial goods, including chemicals, medical devices, car parts, soy products, and meat.
Bangladesh also committed to observe internationally recognized labor rights, ramp up environmental protection efforts, and uphold its agreement to purchase billions of dollars in U.S. agricultural, aircraft, and energy products. The country is heading to general elections and has been led by an interim government since 2024 when former Prime Minister Sheikh Hasina fled to India following a crackdown on protests.
The U.S.'s tariff reduction brings Bangladesh closer to its regional peer India, which currently faces an 18% levy on its exports. Both countries are significant competitors in the clothing and agricultural goods sectors.
The apparel industry forms the backbone of Bangladesh, which is the world's second-largest exporter of clothes after China. The South Asian country has been in long-drawn talks with the White House after President Donald Trump imposed sweeping tariffs on global trading partners in April last year.
The White House stated in a joint statement that the agreement will strengthen the countries' economic ties and offer both 'unprecedented access' to each market. The U.S. will lower its tariff rate on Bangladesh and will also identify certain clothing and textile goods from the country to enter the U.S. free of tariffs. Goods included are those produced with American cotton and man-made textiles, the volume of which will depend on U.S. textile exports to Bangladesh.
The clothing sector accounts for more than 80% of Bangladesh's total export revenue and employs around four million workers. In exchange, Bangladesh has agreed to provide 'significant preferential market access' for American agricultural and industrial goods, including chemicals, medical devices, car parts, soy products, and meat.
Bangladesh also committed to observe internationally recognized labor rights, ramp up environmental protection efforts, and uphold its agreement to purchase billions of dollars in U.S. agricultural, aircraft, and energy products. The country is heading to general elections and has been led by an interim government since 2024 when former Prime Minister Sheikh Hasina fled to India following a crackdown on protests.
The U.S.'s tariff reduction brings Bangladesh closer to its regional peer India, which currently faces an 18% levy on its exports. Both countries are significant competitors in the clothing and agricultural goods sectors.
