US Reduces Bangladesh Tariffs To 19% In Trade Deal

The US and Bangladesh signed an agreement on Monday under which Washington will reduce its tariffs on Bangladesh from 20% to 19%, and Dhaka will open its markets to a wider range of American goods. According to the White House, certain textiles and garments from Bangladesh will enter the US tariff-free. The tariff-free category includes goods made with American cotton and manmade textiles. The agreement is significant as the garment sector accounts for more than 80% of Bangladesh’s exports, employs nearly 4 million workers, and contributes about 10% to the country’s GDP.

The White House said Bangladesh had agreed to further open its market to US industrial and agricultural exports, including chemicals, machinery, medical devices, vehicles and parts, and a range of food products such as soy, dairy, beef, poultry, tree nuts, and fruit. Bangladesh will also take steps to relax non-tariff barriers. A joint statement noted that the agreement will strengthen economic links and provide both countries with broader market access. Muhammad Yunus, chief adviser of Bangladesh’s interim government, said talks on the agreement began in April last year and continued for nine months.

The deal document also states that Biman Bangladesh Airlines plans to acquire 14 Boeing jets, with the possibility of additional orders later. The airline had first indicated the Boeing order in July, while discussions were still ongoing. The agreement includes Bangladesh purchasing US defense equipment and limits imports from certain other countries.

A few days after India and the US signed their trade deal, Bangladesh reached this agreement with the US, meeting several American demands. Under the deal, Bangladeshi goods will benefit from zero-duty access to the US market, while Indian textile exports will face an 18% tariff, which may pose a challenge for India’s exporters in the US apparel market.