The United States and Bangladesh have finalised a new reciprocal trade agreement, marking a significant recalibration of bilateral economic ties at a time of shifting global supply chains and intensifying trade realignments in South Asia. The agreement, announced on Monday, lowers tariffs on Bangladeshi exports to the US while granting American companies wider access to Bangladesh’s industrial and agricultural markets.
Under the revised framework, Bangladeshi goods entering the US will face a 19 per cent tariff a marginal reduction from the 20 per cent imposed last August and a sharp cut from the original reciprocal rate of 37 per cent. US officials have described the agreement as a stabilising measure that balances trade access with strategic and regulatory alignment.
The deal was signed by US Trade Representative Jamieson Greer and Bangladesh’s Adviser for Commerce, Textiles and Jute, Civil Aviation and Tourism, Sheikh Bashir Uddin, in the presence of senior trade officials from both countries.
Relief for Bangladesh’s Export Engine
For Bangladesh, the agreement offers targeted relief to its export-driven economy, particularly the ready-made garments and textiles sector, which accounts for more than 80 per cent of its export earnings. Washington has committed to creating a mechanism that allows select textile and apparel products from Bangladesh to qualify for zero reciprocal tariffs, subject to volume limits that are yet to be finalised.
Crucially, the benefits are linked to Bangladesh’s imports of US textile inputs, such as American cotton and man-made fibres. This structure ties tariff relief directly to increased US exports, reinforcing Washington’s objective of rebalancing trade flows while preserving Bangladesh’s access to its largest export market.
Trade officials said the approach reflects a “managed openness” strategy rather than blanket liberalisation, ensuring predictability for exporters while maintaining leverage for both sides.
Expanded Access for US Products
In return, Bangladesh has agreed to provide preferential entry for a wide range of US industrial and agricultural products. These include chemicals, medical devices, machinery, automobiles and components, ICT equipment, energy supplies, soy products, dairy, beef, poultry, nuts and fruits.
The agreement also addresses non-tariff barriers that have long constrained US exports. Bangladesh will recognise vehicles that meet US federal safety and emission standards, accept US Food and Drug Administration certifications for pharmaceuticals and medical devices, and remove licensing restrictions on remanufactured goods and parts.
Officials say these steps are aimed at improving regulatory predictability and lowering transaction costs, particularly for American manufacturers and healthcare firms seeking access to the Bangladeshi market.
Digital Trade, Customs and Regulatory Reform
Beyond goods, the agreement introduces commitments in digital trade and customs facilitation. Bangladesh has agreed to ensure unrestricted cross-border data flows, support a permanent WTO ban on customs duties for electronic transmissions, and adopt science- and risk-based systems for approving American food and farm imports.
The framework also includes measures to digitise customs processes, strengthen regulatory practices, and improve transparency in trade administration areas where international investors have frequently flagged bottlenecks.
US officials said these reforms are essential to integrating Bangladesh more deeply into global value chains as companies seek alternatives to concentrated manufacturing hubs.
Labour, Environment and Governance Commitments
Labour and environmental standards form a central pillar of the agreement. Bangladesh has committed to upholding internationally recognised labour rights, including freedom of association and collective bargaining, and to tightening enforcement against forced or compulsory labour.
On the environmental front, Dhaka has pledged to strengthen safeguards, improve border trade facilitation, address market distortions linked to subsidies and state-owned enterprises, and reinforce anti-corruption legislation.
While such commitments are common in modern trade agreements, their inclusion reflects ongoing scrutiny of labour conditions in Bangladesh’s garment sector and Washington’s emphasis on values-based trade.
Strategic and Supply Chain Alignment
The agreement goes beyond commerce, signalling closer alignment on economic and national security priorities. Both countries have agreed to cooperate on strengthening supply chains, promoting innovation, and countering unfair trade practices, including duty evasion and export-control risks.
American agencies such as the Export–Import Bank and the US International Development Finance Corporation may, where eligible, support investments in priority Bangladeshi sectors alongside US private firms.
The two sides also acknowledged recent and upcoming commercial agreements spanning agriculture, energy and technology, including the procurement of aircraft, the purchase of around $3.5 billion worth of American agricultural commodities, and energy imports estimated at $15 billion over the next 15 years.
A Calculated Trade Reset
Trade analysts say the agreement reflects Bangladesh’s urgency to secure export stability amid tightening global trade conditions, particularly as India moves aggressively to renegotiate tariff regimes with Washington.
For the US, the deal fits into a broader strategy of reshaping trade relationships through reciprocal frameworks that link market access to regulatory and strategic concessions.
While the agreement falls short of a comprehensive free trade pact, officials on both sides view it as a pragmatic step that locks in near-term benefits while creating space for deeper engagement in the future.
As global trade becomes increasingly fragmented, the US–Bangladesh agreement underscores a growing trend: targeted, conditional trade arrangements designed to manage risk, diversify supply chains and align economic policy with strategic priorities.
