US cuts tariffs on Bangladesh goods, including apparel exception

[WASHINGTON] The US is moving to reduce its so-called reciprocal tariff on goods from Bangladesh and offering a new exemption for textile products, the White House said on Monday (Feb 9), in the latest adjustment for the South Asian country.

US President Donald Trump will lower the country’s overall reciprocal tariff to 19 per cent, after previously slashing the rate from 37 to 20 per cent last year. But the deal also includes a mechanism that allows certain textile merchandise to receive a full exemption from the levies, providing a break to Bangladesh’s apparel industry.

The mechanism will apply to “certain textile and apparel goods from Bangladesh using US-produced cotton and man-made fibre”, interim Bangladesh leader Muhammad Yunus said.

The agreement will see Dhaka provide preferential market access to US industrial and agricultural goods, including chemicals, medical devices, auto parts, energy and farm products. The nation is also committing to address some of its non-tariff barriers limiting US sales, including by accepting vehicles that comply with US regulations and pharmaceuticals that have received US government authorisations.

Bangladesh also agreed to environmental, labour and intellectual property protections.

“The Agreement will provide US and Bangladeshi exporters unprecedented access to each other’s respective markets,” the White House said.

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The White House also said that it anticipated upcoming commercial deals between the two countries that include the procurement of aircraft, the purchase of US$3.5 billion in US agricultural products, and a US$15 billion energy purchase over the next 15 years.

The deal is the latest in a spate of trade agreements hammered out between the US and other countries, including India and Argentina. BLOOMBERG