Bangladesh has secured a 20% US tariff rate—comparable to its key apparel-sector competitors such as Sri Lanka, Vietnam, Pakistan and Indonesia, which received rates between 19% and 20%.
As a result, Bangladesh's relative competitiveness in apparel exports remains unaffected, according to the Chief Adviser's Press Wing.
By contrast, it said, India received a 25% tariff after failing to reach a comprehensive agreement with the US.
The Bangladeshi delegation was led by Commerce Adviser Sk Bashir Uddin, with National Security Adviser Khalilur Rahman also participating in the negotiations held in Washington, DC.
Commerce Adviser Sk Bashir Uddin expressed confidence that Bangladesh will remain competitively positioned as the United States has reduced its previously imposed retaliatory tariff by 17%, setting the new rate at 20% on imports from the country.
Commenting on the development, he said: “With the imposition of a 20% tariff on Bangladeshi exports, we believe our competitive standing will be maintained. There is no immediate concern over disruptions to our exports to the US market. However, we had hoped for a rate below 20%.”
“We negotiated carefully to ensure that our commitments aligned with our national interests and capacity,” said Khalilur Rahman, Bangladesh’s national security adviser.
“Protecting our apparel industry was a top priority, but we also focused our purchase commitments on US agricultural products. This supports our food security goals and fosters goodwill with US farming states,” he said.
“Today, we successfully avoided a potential 35% reciprocal tariff. That is good news for our apparel sector and the millions who depend on it. We have also preserved our global competitiveness and opened up new opportunities to access the world's largest consumer market,” Khalilur added.
Meanwhile, Chief Adviser Prof Muhammad Yunus on Friday said they proudly congratulate the Bangladesh tariff negotiators on securing a landmark trade deal with the United States, a decisive diplomatic victory.
"The future of Bangladesh is undeniably bright. Today’s success stands as a powerful testament to the nation’s resilience and its bold vision for a stronger economic tomorrow," Yunus said in a message after successful tariff negotiations with the United States.
By reducing the tariff to 20%, 17 points lower than anticipated, he said their negotiators have demonstrated remarkable strategic skill and unwavering commitment to safeguarding and advancing Bangladesh’s economic interests.
Yunus said they have been working relentlessly since February and navigated successfully through a complex negotiating process involving tariff, non-tariff and national security matters.
"The agreement they negotiated preserves our comparative advantage, enhances our access to the world's largest consumer market and safeguards our core national interests," he said in his message shared by Deputy Press Secretary Azad Majumder.
This achievement not only underscores Bangladesh’s rising strength on the global stage but also opens the door to greater opportunities, accelerated growth and lasting prosperity, Yunus said.
What now
President Donald Trump on Thursday announced new tariff rates—up to 41%—on imports from 70 countries, just ahead of the August 1 deadline for finalizing bilateral trade agreements.
These agreements extend beyond tariff adjustments to include domestic policy reforms that the Trump administration views as contributing to trade imbalances.
They also address broader economic and national security concerns.
As part of the negotiations, countries were required to make explicit commitments to purchase US goods to help narrow trade deficits.
Given the scope of issues involved, the negotiation process has been complex and time-consuming.
Tariff relief was tied not only to reductions in duties on US exports but also to a country’s willingness to address US concerns on non-tariff barriers, trade imbalances, and security matters, said the Chief Adviser’s press wing on Friday.
President Trump's executive order made clear that each country’s tariff rate would reflect the depth of its commitment across all these areas.
Impact
Mohiuddin Rubel, former Director, BGMEA told Dhaka Tribune: "Exciting developments in trade dynamics! Bangladesh has adjusted its reciprocal tariff to 20%, positioning itself competitively against countries like Pakistan, Cambodia, and Vietnam. Notably, compared to India and China,
which have higher tariffs, this sets Bangladesh apart, potentially attracting business from China. Despite potential short-term impacts on US sales due to increased retail prices, historical resilience suggests Bangladesh is primed for long-term success."
Reflecting on the post-Covid economic landscape, Bangladesh's steadfast growth amidst global challenges is commendable. While short-term growth may vary amid global economic shifts, Bangladesh's strategic positioning and historical performance bode well for sustained progress, Rubel further said.
"Looking ahead, ensuring internal stability and proactive governmental measures will be key in maintaining competitiveness and fostering future growth. Optimism prevails for Bangladesh's trajectory, poised for continued advancement and resilience in the evolving economic landscape," he added.
However, in a minor reprieve that opens the door to further negotiations, the White House said these measures will take effect in a week, not Friday as previously expected, as reported by AFP.
The tariffs are a demonstration of raw economic power that Trump sees putting US exporters in a stronger position while encouraging domestic manufacturing by keeping out foreign imports.
But the muscular approach has raised fears of inflation and other economic fallout in the world's biggest economy.
And with questions hanging over the effectiveness of bilateral trade deals already struck -- including with the European Union and Japan -- the outcome of Trump's plan remained uncertain.
Trump's new measures in an executive order raise duties on nearly 70 economies, from a current 10% level imposed in April when he unleashed "reciprocal" tariffs citing unfair trade practices.
The steeper levels, varying by trading partner, go as high as 41%.
Trump also adjusted some tariff levels threatened in April, with Switzerland now facing a higher 39% duty and Thailand a lower 19% rate.
The tariff on Taiwanese products was revised down to 20%, but its President Lai Ching-te vowed to seek an even lower level.