US Slashes Bangladesh Tariff to 19%, Offers Duty-Free Access for US Cotton Apparel

The United States has reduced the reciprocal tariff on apparel exports from Bangladesh to 19% and removed duties on garments manufactured using cotton and synthetic fibres imported from the US, following a bilateral trade agreement, as per The Business Standard report. 

Tariff Cut for Bangladesh Apparel Exports 

The revised tariff of 19% applies to Bangladesh’s ready made garment exports to the US market. Under the agreement, apparel produced using US origin cotton and synthetic fibres will attract zero duty. 

This change places Bangladesh ahead of Vietnam, which faces a 20% tariff, and aligns it with Pakistan, Cambodia and Indonesia. India has secured a tariff rate of 18%. 

Bangladesh Position in US Apparel Market 

Bangladesh ranks 3rd among apparel exporters to the US, after China and Vietnam. During the last fiscal year, Bangladesh exported garments worth $8.69 billion to the US. 

This included $4.95 billion in woven garments and $2.60 billion in knitwear, highlighting the country’s significant presence in the US clothing market. 

Read More: US and India Forge Landmark Interim Trade Agreement: Check Key Highlights! 

Strategic Trade Commitments in the Agreement 

Beyond tariff adjustments, the agreement includes commitments by Bangladesh to increase imports from the US. Bangladesh is expected to import $346 million worth of US cotton in FY25, compared to $278 million in the previous year. 

The pact also covers imports of US wheat, soybean and LNG, along with provisions related to e commerce tariff exemptions and intellectual property standards. 

Boeing Aircraft Purchase Included 

As part of the broader agreement, Bangladesh has agreed to purchase 25 Boeing aircraft. The estimated value of this transaction is $3.5 billion, equivalent to ₹35,000 crore. 

The agreement is expected to be formally announced by the government through an official press conference. 

Conclusion 

The reduction in tariffs and the removal of duties on garments made from US cotton mark a change in trade terms between the US and Bangladesh. The agreement covers apparel exports, commodity imports and aviation purchases, reflecting a multi sector trade arrangement. 

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