Bangladesh and US Sign Historic Reciprocal Trade Agreement

In a major breakthrough for the country’s export sector, Bangladesh has signed a Reciprocal Trade Agreement (ART) with the United States, significantly lowering tariffs on Bangladeshi goods.

The deal was signed on Monday night, February 9, at approximately 10:00 PM (Dhaka Time) by Bangladesh’s Commerce Adviser, Sheikh Bashiruddin, and US Trade Representative Jamison Greer.

Additionally, the deal establishes a reciprocal zero-tariff policy for garments manufactured in Bangladesh using cotton and synthetic fibers imported from the United States.

Overcoming the "Trump Tariff" Challenge
The agreement marks the culmination of intense negotiations following President Donald Trump's second-term trade policies. In April 2025, the Trump administration announced increased tariffs on over 100 countries to address trade deficits.

Initial Burden: Bangladesh initially faced a proposed 37% additional tariff, which, combined with the existing 15% average duty, threatened to push total tariffs to 50%, crippling the Readymade Garments (RMG) sector.

Interim Relief: Following negotiations by the interim government, the additional tariff was lowered to 20% on August 7, 2025, bringing the total duty down to 35%.

The New Deal: Monday’s agreement slashes that further to a unified 19%, offering a massive competitive advantage for Bangladeshi exporters.

Reducing the Trade Deficit
To secure these concessions, Washington required Bangladesh to narrow the trade gap. Currently, the annual trade volume stands at approximately $8 billion, with Bangladesh exporting $6 billion worth of goods.

To balance the scales, Bangladesh has committed to several large-scale imports over the next five years:

• Wheat: 3.5 million tons.
• Other Commodities: Increased imports of LNG, soybean oil, corn, and cotton.
• Technology & Aviation: Procurement of aircraft, parts, and machinery.

Strategic Presence
The signing ceremony was attended by high-ranking officials, including Lutfey Siddiqi (Special Assistant to the Chief Adviser on International Affairs), Dr. Khalilur Rahman (National Security Adviser), and Commerce Secretary Mahbubur Rahman.

Commerce Adviser Sheikh Bashiruddin had previously hinted at this development, noting that the government was pushing for the maximum possible reduction to protect the country's primary export industry.