A Timely Trade Accord
In a significant development just prior to Bangladesh's national elections on February 12th, the nation's commerce and national security advisors, Sheikh
Bashir Uddin and Khalilur Rahman respectively, inked a pivotal reciprocal tariff agreement with the United States. Representing Washington was US Trade Representative Ambassador Jamieson Greer. This agreement, the culmination of nine months of diligent negotiations that commenced in April of the previous year, marks a substantial stride in strengthening economic ties between the two countries. The pact is particularly noteworthy for its timing, arriving as election campaigning reaches its peak and promising to offer a tangible economic benefit that will be welcomed by whichever political party emerges victorious from the upcoming polls.
Tariff Reductions Explained
The core of this newly established reciprocal tariff agreement entails a reduction of US import duties on Bangladeshi goods, bringing them down from a previous 20% to a more favorable 19%. This adjustment represents a welcome shift from the higher tariffs previously imposed, such as the 37% rate introduced by the Trump administration in April 2025, which was later adjusted to 35% and subsequently to 20% by August. Furthermore, the agreement introduces a highly beneficial provision: zero tariffs on specific categories of textile and apparel items that are manufactured using American cotton or man-made fibers. This dual approach of lowering overall tariffs while offering duty-free access for certain goods is expected to provide a significant competitive advantage for Bangladeshi exporters in the lucrative US market, especially given that garments constitute approximately 95% of Bangladesh's exports to the United States.
Economic Implications and Reactions
Commerce Adviser Sheikh Bashir Uddin described the agreement as a "historic step," underscoring its potential to unlock expanded market opportunities for both Bangladesh and the United States. The establishment of a system that allows for zero reciprocal tariffs on select textile and apparel products made with US-sourced materials is particularly significant. National Security Adviser Khalilur Rahman, who spearheaded the negotiation efforts, expressed optimism that these changes will directly benefit exporters and provide a substantial boost to Bangladesh's globally recognized garment sector. The Council of Advisers has officially sanctioned the deal, which will be formally implemented once both parties issue the necessary notifications. This pact is being hailed by officials as a major win for job creation and economic growth as the nation approaches a crucial electoral juncture.
