Bangladesh and the United States signed the much-discussed agreement on Monday. According to a statement from the White House, the deal will strengthen bilateral economic relations.
The agreement will grant Bangladeshi and US exporters significant preferential access to each other’s markets. It will also build on the long-standing economic partnership established under the US-Bangladesh Trade and Investment Cooperation Forum Agreement (TICFA), signed in 2013.
Under the agreement, the US has agreed to reduce the reciprocal tariff rate on Bangladeshi goods to 19 percent. Previously, this rate was 37 percent, which was lowered to 20 percent in August last year. The new agreement cuts it by another one percent.
Key terms of Reciprocal Trade Agreement
Bangladesh pledges to grant broad preferential market access for US industrial and agricultural goods. This includes chemicals, medical devices, machinery, motor vehicles and parts, ICT equipment, energy products, soy and dairy items, beef, poultry, tree nuts, and fruit.
The US will lower the reciprocal tariff rate originally set under Executive Order 14346 (2 April 2025) to 19 percent on goods originating from Bangladesh. In addition, certain products listed in Annex III of Executive Order 14346 (5 September 2025) will qualify for a zero percent reciprocal tariff.
Washington also commits to creating a mechanism that allows specified volumes of Bangladeshi textiles and apparel to enter duty-free. The quota will be tied to the volume of US textile exports, such as cotton and man-made fiber inputs, shipped to Bangladesh.
Both countries agree to tackle Bangladesh’s non-tariff barriers. Dhaka will accept vehicles built to US federal safety and emissions standards, recognise FDA certificates and prior marketing authorisations for medical devices and pharmaceuticals, and remove restrictions on imports of US remanufactured goods and parts.
Bangladesh further commits to enabling free cross-border data flows, supporting a permanent WTO moratorium on customs duties for electronic transmissions, applying science- and risk-based processes for US food and agricultural imports, removing insurance market barriers, digitising customs procedures, and adopting good regulatory practices.
Both sides note recent and upcoming commercial deals in agriculture, energy, and technology: Aircraft procurement, purchases of about $3.5 billion in US agricultural products (wheat, soy, cotton, corn) and energy imports valued at roughly $15 billion over 15 years.
On labour rights, Bangladesh will prohibit imports of goods made with forced or compulsory labour, amend labor laws to fully protect freedom of association and collective bargaining, and strengthen enforcement.
Environmental commitments include maintaining high standards of protection, enforcing environmental laws, improving customs and trade facilitation, and addressing distortions from subsidies and state-owned enterprises.
Bangladesh will also adopt stronger intellectual property protections, accede to key international treaties, and implement new rules on geographical indications to safeguard US market access particularly for cheese and meat producers relying on common product names.
Both nations pledge to deepen economic and security alignment, enhancing supply chain resilience and innovation. They will jointly combat unfair trade practices, duty evasion, cooperate on export controls, and share information on inbound investment.
Bangladesh will strengthen and enforce comprehensive anti-corruption laws.
The United States, through institutions such as the Export-Import Bank (EXIM) and the International Development Finance Corporation (DFC), will consider investment financing in critical Bangladeshi sectors, in collaboration with US private partners, subject to eligibility and law.
The US and Bangladesh will promptly finalise the Reciprocal Trade Agreement, completing domestic procedures before it enters into force.
