Bangladesh has secured exemptions for some clothes and textiles that are made with US-produced materials, as part of a new agreement announced on Monday. As part of the deal, Washington will also 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 announcement that the agreement will strengthen the countries' economic ties and offer both unprecedented access to each other's markets. The US will lower its tariff rate on Bangladesh and will also identify certain clothing and textile goods from the country that will enter the US free of tariffs. These include products produced with American cotton and man-made textiles, with volumes determined by US 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 return, Bangladesh has agreed to provide significant preferential market access to a range of American agricultural and industrial goods, including chemicals, medical devices, car parts, soy products, and meat.
The agreement also involves Bangladesh recognizing American food and drug and vehicle safety and emission rules, simplifying the entry of US goods into the country. Additionally, Bangladesh committed to upholding internationally recognized labor rights, enhancing environmental protection efforts, and adhering to a pact to purchase several billion dollars worth of American agriculture, aircraft, and energy products.
Following the agreement’s announcement, Bangladesh, set to hold general elections soon, is navigating a complex political landscape, having been led by an interim government since 2024. The latest tariff adjustments have positioned Bangladesh more favorably against India, its regional competitor, which faces a higher tariff rate of 18%. Both nations currently vie for dominance in clothing and footwear exports.
The White House stated in a joint announcement that the agreement will strengthen the countries' economic ties and offer both unprecedented access to each other's markets. The US will lower its tariff rate on Bangladesh and will also identify certain clothing and textile goods from the country that will enter the US free of tariffs. These include products produced with American cotton and man-made textiles, with volumes determined by US 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 return, Bangladesh has agreed to provide significant preferential market access to a range of American agricultural and industrial goods, including chemicals, medical devices, car parts, soy products, and meat.
The agreement also involves Bangladesh recognizing American food and drug and vehicle safety and emission rules, simplifying the entry of US goods into the country. Additionally, Bangladesh committed to upholding internationally recognized labor rights, enhancing environmental protection efforts, and adhering to a pact to purchase several billion dollars worth of American agriculture, aircraft, and energy products.
Following the agreement’s announcement, Bangladesh, set to hold general elections soon, is navigating a complex political landscape, having been led by an interim government since 2024. The latest tariff adjustments have positioned Bangladesh more favorably against India, its regional competitor, which faces a higher tariff rate of 18%. Both nations currently vie for dominance in clothing and footwear exports.
