U.S. to Exempt Select Bangladeshi Clothing From Tariffs Under New Trade Deal

The United States has agreed to exempt some Bangladeshi clothing and textiles from tariffs and to reduce its overall tariff rate on Bangladesh from 20% to 19%, under a new bilateral trade agreement announced Monday. The move comes after months of negotiations between Dhaka and Washington, following broad U.S. tariffs imposed by President Donald Trump last year.

Under the deal, certain garments and textile goods produced in Bangladesh using U.S.-made cotton or man-made fibres will qualify for duty-free access to the American market. The volume of eligible goods will depend on how much U.S. textile material is exported to Bangladesh in return. The White House said the agreement will strengthen economic ties and provide “unprecedented access” to each other’s markets.

Bangladesh’s apparel industry—responsible for over 80% of the nation’s export revenue and employing nearly four million workers—is expected to benefit directly from increased access to the U.S., its largest single-country customer after the European Union. Bangladesh is currently the world’s second-largest clothing exporter after China.

In exchange, Dhaka has agreed to grant preferential market access to a wide array of American agriculture and industrial products, including chemicals, soy goods, medical devices, car parts and meat. Bangladesh will also recognize U.S. food-safety, drug-safety and vehicle-emission standards, easing regulatory hurdles for American exporters.

The agreement additionally requires Bangladesh to uphold international labour rights, strengthen environmental protections and continue large-scale purchases of American agriculture, aircraft and energy products. The Biden administration said these commitments “reflect joint priorities for fair trade and sustainable development.”

The announcement comes just days before Bangladesh heads to the polls. The country has been governed by an interim administration since 2024, when former prime minister Sheikh Hasina fled to India after being removed following a deadly crackdown on student protesters.

The U.S. tariff cut positions Bangladesh closer to regional competitor India, which currently faces an 18% tariff for similar exports. Both countries compete in global markets for clothing, footwear and agricultural products.