Bangladesh is set to sign a trade agreement with the United States on Monday aimed at reducing reciprocal tariffs, particularly on garment exports.Under the deal, the US will waive tariffs on garments made using American raw materials such as cotton and yarn. If a product contains a high share of US inputs, that portion will be exempt from the existing 20 percent tariff.
The agreement is expected to significantly benefit Bangladesh’s garment sector, which accounts for nearly 95 percent of the country’s exports to the US. Many factories can source up to 70 percent of their raw materials from the US.
To narrow the trade gap, Bangladesh has committed to increasing imports of American goods, including cotton, wheat, soybeans, aircraft, and energy products. The deal follows months of negotiations after the US imposed high reciprocal tariffs last year.
