The BGA research team, led by head of research Murray Hiebert, wrote an update to clients regarding the US-Bangladesh reciprocal trade agreement.

Context

  • The United States and Bangladesh on February 9 announced an agreement on a new reciprocal trade framework, marking a significant step in their bilateral economic relationship. According to the White House joint statement, the framework aims to strengthen longstanding economic ties and expand market access on both sides. Key elements in the agreement are the U.S decision to reduce its reciprocal tariff rate to 19 percent on goods originating from Bangladesh and Bangladesh’s commitment to provide significant preferential market access for U.S. industrial and agricultural goods. The agreement also includes commitments to address non-tariff barriers, regulatory alignment, labor and environmental protections and digital trade — all of which are critical for U.S. companies operating in Bangladesh.  
  • Total trade in goods and services between the two countries was an estimated $12.4 billion in 2024, according to the U.S, Trade Representative office. The United States imported $8.4 billion from Bangladesh and U.S. exports were $2.3 billion.

Significance

  • The United States will reduce the reciprocal tariff rate to 19 percent from 20 percent on goods originating in Bangladesh. Under President Donald Trump’s Executive Order 14346, specific products may be identified for zero reciprocal tariffs. A specified volume of Bangladeshi textiles and apparel may also enter at zero tariffs, particularly those linked to U.S. exports of textile inputs. This anchors steadier U.S. access for Bangladesh’s priority exports while channeling two-way supply chain complementarity.
  • Bangladesh will provide significant preferential market access for U.S. industrial and agricultural goods such as chemicals; medical devices; machinery and motor vehicles/parts; information and communication equipment; energy; soy and dairy; beef and poultry; tree nuts and fruit. These goods will be supported by tariff phase-outs and Bangladesh alignment of sanitary and phytosanitary measures. Expect shorter time to market and greater clarity for landed pricing for U.S. shipments, while Bangladeshi manufacturers and consumers gain access to higher quality inputs and energy that support industrial upgrading and food security. 

Implications

  • The agreement marks a shift from fragmented, higher friction trade to clearer rules, more predictable customs and data flows, and faster pathways for the movement of goods and services. These changes create new openings for faster market entry, reduced compliance friction, and more reliable access across sectors including apparel, healthcare, agriculture, energy and technology.

If you have questions or comments, please contact the research team at research@bowergroupasia.com.

Best regards,

BGA Research Team

A small ginko leaf

Head of Research

Murray is a top Asia expert and skilled researcher with three decades of experience living and working in Asia. His networks in business, media and government circles are deep and wide-ranging. He is also a senior associate of the Southeast Asia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Earlier he served as deputy director of the program for six years. Prior to joining CSIS, Murray served for five years as senior director for Southeast Asia at the U.S. Chamber of Commerce where he worked with leading American companies, the U.S. government and Southeast Asian ... Read More