After nine months of intensive negotiations, Bangladesh and the United States have signed a landmark bilateral trade agreement, reducing retaliatory duties and creating new opportunities for the country’s apparel industry.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) welcomed the pact, highlighting that it reduces retaliatory duties on Bangladeshi products in the US from 20 per cent to 19 per cent.
More importantly, apparel made using cotton and synthetic fibres imported from the US will now be fully exempt from such duties.
Mohammad Hatem, president of the Exporters Association of Bangladesh (EAB), told TIMES of Bangladesh that while a one-percentage-point reduction in reciprocal tariff may not bring immediate gains, duty-free access for products made with US cotton could provide a major boost.
“This will benefit not only garment exporters but also local spinning mills. Cotton imported from the US is converted into yarn locally and then supplied to garment manufacturers,” he said.
“Garments exported with certificates proving US-origin cotton will now enjoy duty-free access,” Hatem added.
Hatem further said that it is too early to estimate the full export impact, as the reciprocal tariff issues remain uncertain.
“However, exports are expected to grow, and Bangladesh will certainly benefit,” he added.
The agreement was finalised after multiple consultations with government commerce advisers and ministry officials.
“We offered several suggestions that helped Bangladesh secure a favorable position in this deal,” Hatem said.
The BGMEA, the apex body of the apparel sector, stressed that if the facility is fully utilised, Bangladesh’s access to the US apparel market could increase significantly.
It also cautioned that proper evaluation and traceability of US-sourced raw materials will be essential.
While US cotton is of high quality, its higher cost could be offset by competitive yarn prices from local spinners, unlocking further export growth.
The final terms of the agreement are yet to be formally communicated. Once official documentation is received, the BGMEA plans to convene an urgent meeting with members and coordinate with the US Embassy in Dhaka and US Trade Representative (USTR) to determine the next steps.
Bangladesh is currently the third-largest apparel supplier to the US, holding more than 10 per cent of the market last year behind Vietnam and China.
According to OTEXA data, the US imported $78.21 billion worth of apparel globally from December 2024 to November 2025, with Vietnam leading at $16.54 billion (21.15 per cent), China at $11.35 billion (14.51 per cent), and Bangladesh at $8.18 billion (10.46 per cent).
Engineer Rajib Haider, director of the Bangladesh Textile Mills Association (BTMA), said domestic yarn manufacturers stand to gain from duty-free facilities, potentially creating new opportunities to expand knit apparel exports to the US, similar to the EU market.
He urged the government to provide policy support for manufacturers to fully capitalise on this opportunity, noting that the sector is on the verge of a crisis.
According to the Export Promotion Bureau, garment exports to the US from February 2025 to January 2026 reached $7.54 billion, representing 19.46 per cent of Bangladesh’s total garment exports of $38.78 billion.
Other major suppliers included India ($4.95 billion), Cambodia ($4.71 billion), Indonesia ($4.63 billion), Mexico ($2.60 billion), Pakistan ($2.40 billion), and Honduras ($2.04 billion).
Industry insiders say Bangladesh’s double-digit market share reflects its competitive pricing, large-scale manufacturing capacity, and strong buyer relationships.
However, growing competition from Vietnam and other emerging suppliers underscores the need for product diversification, value addition, and faster lead times to strengthen Bangladesh’s foothold in the US market.
