The Bangladeshi government is celebrating a newly negotiated 20% tariff rate on its exports to the United States, a move hailed by officials as a “decisive diplomatic victory” that safeguards the nation’s vital apparel industry.The deal, announced ahead of an August 1st deadline set by the Trump administration, averts a much higher potential tariff and preserves Bangladesh’s competitive edge in the global market.
Chief Adviser to the Bangladesh government, Professor Muhammad Yunus, praised the outcome of the complex trade talks. “We proudly congratulate the Bangladesh tariff negotiators on securing a landmark trade deal with the United States,” Yunus said in a statement. He highlighted that the 20% rate was significantly lower than the 35% tariff that had been previously announced for Bangladesh.
The new tariff is part of a broader US strategy under President Donald Trump to implement “reciprocal” tariffs on dozens of countries to address trade imbalances.The negotiations, which began in February, were described as complex, involving discussions on non-tariff barriers and national security matters. As part of the agreement, Bangladesh committed to increasing imports of U.S. agricultural products, such as cotton and soybeans, to help narrow the trade gap between the two nations.
A key success of the deal is that it aligns Bangladesh’s tariff rate with its primary competitors in the apparel sector. Countries like Sri Lanka and Vietnam also secured a 20% rate, while Pakistan and Indonesia received a 19% rate. This ensures that “Bangladesh’s relative competitiveness in apparel exports remains unaffected,” according to a government statement. By contrast, neighboring India will face a steeper 25% tariff.
Dr. Khalilur Rahman, Bangladesh’s National Security Advisor and lead negotiator, stated that protecting the apparel industry was a top priority. “Today, we successfully avoided a potential 35 per cent reciprocal tariff. That’s good news for our apparel sector and the millions who depend on it,” Rahman said.
The garment industry is the cornerstone of the South Asian nation’s economy, accounting for approximately 85% of its export revenue and employing around 4.4 million people, the majority of whom are women.The United States is the single largest export market for Bangladesh’s ready-made garments.
Chief Adviser Professor Muhammad Yunus expressed optimism for the nation’s economic future following the deal. “This achievement not only underscores Bangladesh’s rising strength on the global stage but also opens the door to greater opportunities, accelerated growth, and lasting prosperity,” he stated.