Trade deal signed with the US, reciprocal tariff cut by 1pc
Bangladesh signed a trade agreement with the United States at 10:00 pm Bangladesh time Monday. Following the deal, the reciprocal tariff imposed by the US on Bangladeshi exports has been reduced by 1 percentage point.
As a result, the tariff rate on Bangladeshi goods has fallen from 20 per cent to 19 per cent.
At the same time, garments manufactured using cotton and synthetic fibres imported from the United States will face no reciprocal tariff when exported to that country.
In other words, apparel produced with US-sourced raw materials will not be subject to any reciprocal duty upon export to the US, according to sources at the Ministry of Commerce.
The agreement was signed by commerce adviser Sk Bashir Uddin on behalf of Bangladesh and by US trade representative Jamieson Greer for the United States on Monday.
However, the Ministry of Commerce has not yet issued an official statement following the signing. It has said that a comprehensive briefing on all aspects of the agreement will be presented at 2:30 pm Tuesday.
Meanwhile, leading exporters involved in garment shipments to the US consider the overall 1 per cent tariff reduction and the duty-free facility for apparel made from imported US raw materials to be very encouraging and positive for Bangladesh.
Ha-Meem Group is one of the country’s leading exporters of ready-made garments to the US market.
Asked about the agreement and its benefits, Ha-Meem Group managing director AK Azad told Prothom Alo tonight, “This news is very pleasing for us. The benefits we have obtained from the agreement are highly positive. We hope we will be able to utilise these advantages effectively. We already import a significant amount of cotton from the US. That volume will now increase further, because garments made from US-imported cotton will face no reciprocal duty when exported there. We expect to make good use of this facility, and our exports to the US should increase significantly.”
Initially, commerce adviser Sk Bashir Uddin and commerce secretary Mahbubur Rahman were scheduled to travel to Washington, DC, to sign the agreement.
However, they ultimately did not go. National security adviser Khalilur Rahman, the commerce adviser, and the commerce secretary joined the signing ceremony virtually from Bangladesh. The chief adviser’s special assistant on international affairs, Lutfey Siddiqi, also joined virtually.
On the occasion of the signing, a five-member delegation led by Khadija Nazneen, additional secretary of the WTO Wing of the Ministry of Commerce, travelled to Washington.
The other four members were joint secretaries Firoz Uddin Ahmed and Mostafizur Rahman, senior assistant secretary Sheikh Shamsul Arefin, and National Board of Revenue commissioner Raich Uddin Khan. The agreement was concluded in the physical presence of this delegation.
Commenting on the agreement, Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), told Prothom Alo, “We do not know what conditions are included in the deal. In my view, concluding such an agreement at the end of the tenure of the current interim government was not appropriate. We have received some new benefits, which may be considered an achievement. But we do not know what conditions must be met in return or what Bangladesh will have to do.
Therefore, it is difficult to say in simple terms how beneficial this agreement is for Bangladesh. Responsibility for implementing it will fall on the next government. Whether that government is prepared to fulfil the conditions, and whether it has been properly briefed by the present administration, are also major questions. I believe the gains and losses must be assessed after a comprehensive review of the agreement’s terms.”
On 2 April, 2025, US president Donald Trump announced reciprocal tariffs at varying rates on imports from 100 exporting countries.
Initially, the rate for Bangladesh was set at 37 per cent. The US later postponed the measure for three months. Exactly three months later, on 7 July, 2025, Trump announced that the tariff would be reduced from 37 per cent to 35 per cent.
After further negotiations, it was cut to 20 per cent on 2 August last year, effective from 7 August. Apart from the reciprocal duty, Bangladeshi exports were already subject to a 15 per cent tariff. Following the new duties, the total tariff burden on Bangladeshi exports to the US currently stands at 34 per cent.
Bilateral trade between Bangladesh and the United States amounts to $8 billion, of which Bangladesh exports goods worth $6 billion.
Bangladesh imports goods worth $2 billion from the US, meaning the trade balance is in Bangladesh’s favour. To reduce this imbalance, Bangladesh has already begun importing wheat, soybean oil, maize, cotton and other agricultural products, as well as aircraft and aircraft parts, and liquefied natural gas (LNG).