US Grants Duty-Free Access for Garments Made with American Cotton

In a milestone for the country's textile industry, the United States has officially granted zero-tariff access for garments manufactured in Bangladesh using American-sourced cotton and synthetic fibers.

The agreement, signed on Monday night, February 9, at approximately 10:00 PM (Dhaka Time), also reduces the overall "reciprocal tariff" on other Bangladeshi exports from 20% down to 19%.

The historic Agreement on Reciprocal Trade (ART) was signed by Bangladesh’s Commerce Adviser, Sheikh Bashiruddin, and US Trade Representative (USTR), Jamison Greer.

Senior officials, including National Security Adviser Dr. Khalilur Rahman and Special Envoy Lutfey Siddiqi, joined the ceremony virtually from Dhaka.

Key Outcomes of the Trade Deal
This agreement concludes nine months of high-stakes negotiations that began in April 2025. The final terms provide significant relief to Bangladesh’s export-driven economy:

Zero Tariffs on US-Input Apparel: Ready-made garments (RMG) produced in Bangladesh using US cotton and man-made fibers will now enter the US market with 0% reciprocal duty.

General Tariff Reduction: For all other products, the reciprocal tariff rate has been lowered to 19%. This marks a massive drop from the 37% initially proposed by the Trump administration last year.

Sector-Specific Exemptions: In addition to apparel, Bangladeshi-made pharmaceutical ingredients and aircraft parts will also enjoy duty-free access, aligning with similar US trade deals worldwide.

Strategic Balancing of Trade
To secure these concessions, Bangladesh has agreed to provide preferential market access for a wide range of American industrial and agricultural products.

What Bangladesh will import from the US:

• Agriculture: $3.5 billion in agricultural products over 5 years, including soybean products, dairy, beef, and 3.5 million tons of wheat.
• Energy: An estimated $15 billion in energy products over the next 15 years.
• Aviation & Defense: Biman Bangladesh Airlines plans to purchase 14 Boeing aircraft. Bangladesh also committed to purchasing US military equipment while limiting acquisitions from certain other suppliers.
• Standards: Bangladesh will now recognize US FDA certifications and adopt US vehicle safety and emissions standards.

Economic Impact
With the RMG sector accounting for over 80% of Bangladesh’s export earnings, the "Zero-Tariff" provision for US-cotton garments is expected to be a "game-changer."

Industry analysts believe this will create a mutually beneficial supply chain where Bangladesh consumes more US raw materials in exchange for cheaper access to the American retail market.

At a 19% flat rate, Bangladesh is now positioned competitively alongside regional rivals like India, which recently secured an 18% rate under similar negotiations.