On May 1, 2026, Bangladesh agreed to buy 14 Boeing aircraft for its national carrier, Biman, in a deal worth around $3.7 billion. What made this remarkable was that it reversed an earlier plan, under the Hasina government, to buy from Airbus, a bid that French, German and British diplomats had publicly backed. Bangladesh chose Boeing anyway.
The decision had little to do with fleet planning or fuel economics. It was tied to a wider American trade agenda that had placed Bangladesh’s export economy under pressure.
The purchase was part of a broader package of concessions Bangladesh made to secure a reduction in tariffs on its garment exports, the sector that earns over 80% of the country’s export income and employs roughly four million workers.
Washington had imposed a 37% reciprocal tariff in April 2025, a rate that would have been devastating. By February 2026 it had been negotiated down to 19%. The Agreement on Reciprocal Trade (ART), signed just three days before Bangladesh’s national elections, was the vehicle.
Defenders of the deal will say Bangladesh had little choice, that 19% is better than 37, and that Biman already flies Boeing. But this is the point. The question is not whether Bangladesh needed aircraft, or whether a lower tariff was better than catastrophe. The question is the price Bangladesh was made to pay for relief from a threat the United States had imposed in the first place.
Behind these%ages are four million garment workers, most of them women, whose labour sustains the export economy. The whole negotiation rests on their productivity, yet they appear in the agreement only as a cost to be disciplined and a workforce whose wages must not rise too far above what global buyers demand.
The terms of the bargain
The ART is not a free trade agreement. It offers no broad tariff elimination and no framework for mutual development. It imposes obligations on Bangladesh in exchange for a tariff ceiling still higher than many competitors face.
Mustafizur Rahman of the Centre for Policy Dialogue laid out the arithmetic in his Counterpoint BD analysis. Under WTO rules, the Most Favoured Nation (MFN) tariff is meant to ensure a level playing field: A pair of jeans from Bangladesh faces the same duty as a pair from any other member.
But once the 19% reciprocal tariff is added on top of the existing MFN rate, the combined duty on Bangladeshi goods entering the US comes to about 34%. At the Bangladesh end, duties on many American imports fall to near zero.
Of the 1,638 tariff lines exempted from reciprocal tariffs, Bangladesh exports only 10 to 15 items, in tiny quantities. No item of real export value is included. The garments that are the backbone of the economy stay subject to the full 34%.
Bangladesh didn’t open its market voluntarily. It was coerced. Washington imposed a crushing tariff, waited for panic to set in among exporters, then offered partial relief in exchange for Bangladesh dismantling its own protections. The tariff was the lever. The market opening was the objective.
Figure: The tariff ratchet. The chart tracks the effective combined duty on Bangladeshi goods entering the US, from the pre-Trump MFN baseline through the April 2025 tariff shock to the February 2026 ART. Source basis: CPD analysis (Mustafizur Rahman, 2026); USTR fact sheets.
The periphery exports low-value goods, in Bangladesh’s case garments stitched by cheap and intensely exploited labour, while importing high-value manufactures and technology from the core.
The surplus produced by Bangladeshi workers flows upward through the chain to American retailers and consumers, while the country stays locked into a narrow export base. The ART does not remedy this. It makes peripheral subordination explicit and contractual.
Section 301 and the weakening of the rules-based order
The US did not reach this deal through the WTO. It arrived through pressure. When the legal basis for the original tariffs was challenged and the Supreme Court struck down one of the instruments the White House relied on, the administration turned to Section 301 of the Trade Act of 1974, which lets the president punish “unfair” trade practices without Congressional or judicial approval. It was the same tool used against China in 2018.
Now it targets the cash subsidies Bangladesh gives its exporters, subsidies that are legal under WTO rules for least developed countries and already being phased out. The irony is that those same subsidies keep Bangladeshi garment prices low, directly benefiting the American retailers and consumers who buy them. The complaint is less about fair trade than about leverage.
This reveals the hierarchy inside the so-called rules-based system. For a country like Bangladesh, the rules bind when they restrict development policy and turn fragile when they obstruct American interests. When those interests are served, the rules hold. When they are not, powerful states find ways around them, and the peripheral country has little recourse.
The IMF and World Bank: The other arm of pressure
The ART does not operate alone. Alongside it runs the IMF’s $5.5 billion program. Its January 2026 review was grim: Growth down to 3.7%, inflation at 8.2%, and non-performing loans at 24.1%, three times the South Asian average. The Fund’s prescriptions are familiar from four decades of structural adjustment. The language is technocratic but the meaning is plain: “Exchange rate flexibility” means devaluation, and “subsidy rationalization” means cutting support poor households rely on.
What is striking is how closely these conditions track the ART’s. The agreement even ties Bangladesh’s trade obligations to its IMF commitments. One institution restructures domestic policy, the other external trade, and together they leave any government very little room to choose a different path.
LDC graduation: The tightening squeeze
Bangladesh was set to graduate from LDC status in November 2026, presented officially as a milestone. In practice it strips away preferences central to the export model.
The WTO estimates graduation could cut exports by 14%, up to $8 billion a year. EU duty-free access expires after a grace period unless Bangladesh meets the labour, environmental and governance standards of the GSP+ scheme, conditions its record makes hard to satisfy. It also loses its WTO exemptions on export subsidies and on drug patents, exposing the pharmaceutical sector that grew by making generics.
Every country that industrialized, whether Britain, the United States, South Korea, or Japan, did so behind tariff walls and state subsidy. The US kept some of the highest tariffs in the world through the 19th century. Ha-Joon Chang calls this “kicking away the ladder”: Those who climbed up by protection now insist Bangladesh cannot.
Bangladesh is being asked to absorb graduation, open its market under the ART, and implement IMF austerity at the same time.
Together they amount to structural adjustment by another name, imposed through an interlocking web of treaties and conditions rather than a single institution.
The garment workers whose labour sustains all of it are the last consulted and the first to pay. The entire logic of the country’s place in the world economy depends on their wages staying low. The ART does not challenge that logic. It entrenches it.
In the second part, I turn to the geopolitics: The pressure from India, the overtures from China, the rapprochement with Pakistan, and how the ART’s “non-market economy” clause is designed to limit Bangladesh’s room to manoeuvre between competing great powers.