US has announced a 1% tariff reduction for Bangladesh, with no reciprocal duties applied on certain goods
Trump had first proposed a 37% tariff on goods from Bangladesh as part of broader trade measures affecting several economies. In August, he later lowered the duty on Bangladeshi products to 20%.
The United States and Bangladesh reached a deal on Monday that will reduce US tariffs on goods from the world’s second-largest garment manufacturer.
Washington has also pledged to work to exempt certain textiles and clothing from the duty.
A joint statement issued by the White House said that under this agreement, President Donald Trump’s administration will reduce US “reciprocal” tariffs on Bangladeshi products from 20 percent to 19 percent.
Such “reciprocal” duties were imposed by Trump last year to correct trade imbalances or practices that Washington considered unfair.
Trump initially imposed a 37 percent tariff rate on Bangladeshi goods, as he also targeted dozens of other economies with higher duties. He finally reduced the tariff rate on Bangladeshi products to 20 percent in August. Textile and garment production accounts for approximately 80 percent of Bangladesh’s exports, and the industry is rebuilding after significant losses following the overthrow of the government in a student-led revolution in 2024.
With the new deal, Washington is committed to creating a system that will provide zero reciprocal tariff rates on certain textile and clothing items from Bangladesh.
This means that some volumes of such imports may receive special treatment.
But this volume will be linked to the volume of US textile exports to the country, such as US-made cotton and man-made fiber inputs.
In addition to textiles, the United States will also identify other products that could be subject to zero percent “reciprocal” tariffs.
Muhammad Yunus, who leads Bangladesh’s interim government, said in a statement on social media that the agreement was signed on Monday and will come into effect after notifications from both sides.
According to the statement, Bangladesh’s National Security Advisor Khalilur Rahman said that the expected tariff exemptions for textile and clothing exports using US inputs “will significantly boost our garment sector.”
According to the Bangladesh Bank and the National Board of Revenue, Bangladesh exported approximately $8.4 billion worth of goods to the US in 2024, while imports from the US were $2.2 billion.
US textile companies sourcing products from Bangladesh include Fruit of the Loom, Levi Strauss, and VF Corp. – whose brands include Vans, Timberland, and The North Face.
