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Bangladesh Secures Tariff Relief In New Us Trade Deal, Duty Free Access For Garments Using American Fibres

• By  Textile Excellence
• February 10, 2026

Bangladesh has secured a modest but strategic tariff reduction in its trade with the United States, bringing the reciprocal duty on its exports down from 20% to 19%. The agreement also offers a major incentive. Garments made using US origin cotton or synthetic fibres will now enter the American market without any reciprocal tariff.

The United States remains Bangladesh’s largest apparel destination. Bilateral trade between the two countries stands near US$ 8 billion, of which Bangladeshi exports contribute around US$ 6 billion. Apparel accounts for more than 80% of those shipments, making tariff competitiveness critical for the country’s export growth.

Recent trade data shows intense competition among key suppliers to the US. China’s textile and apparel exports to the US stood near US$ 18.1 billion in 2025 despite a steep 47.5% tariff. Vietnam shipped around US$ 14.6 billion at a 20% tariff. Bangladesh exported about US$ 7.5 billion at 20% duty earlier, while India recorded roughly US$ 9.6 billion amid higher tariff pressures.

The new arrangement gives Bangladesh a strong strategic advantage. Zero tariff access on garments made from US fibres can significantly reduce landed costs, improve price competitiveness, and attract larger sourcing orders from American brands. The provision is expected to shift raw material sourcing patterns and deepen trade ties between US fibre producers and Bangladeshi manufacturers.

CITI Chairman Shri Ashwin Chandran said the industry body is closely tracking the development and awaiting clarity on the mechanism that will allow certain Bangladeshi textile and apparel products to enter the US at zero reciprocal tariff. He noted that the move creates a fresh challenge for Indian exporters, as the tariff gap between India and Bangladesh has narrowed from 2% to 1% in a sector that operates on tight margins. Chandran also cautioned that the agreement could affect India’s cotton yarn exports to Bangladesh, as the new arrangement may encourage greater use of US origin fibres. He added that any additional advantage for Bangladesh could intensify competition for Indian suppliers in the US market. 

CITI Chairman Shri Ashwin Chandran said the industry body is closely tracking the development and awaiting clarity on the mechanism that will allow certain Bangladeshi textile and apparel products to enter the US at zero reciprocal tariff. He noted that the move creates a fresh challenge for Indian exporters, as the tariff gap between India and Bangladesh has narrowed from 2% to 1% in a sector that operates on tight margins. Chandran also cautioned that the agreement could affect India’s cotton yarn exports to Bangladesh, as the new arrangement may encourage greater use of US origin fibres.