US bends steep tariffs to 20pc for Bangladesh

Bangladesh finally clinches a deal leveling the trading field amongst the competitors on the US market as the United States cut tariffs on Bangladeshi exports to 20 per cent from the threatened 35 per cent.

Sources said the decision on the concessional deal was made Thursday (July 31) local time on extensive tradeoffs conceded by Bangladesh in the form of augmented imports from the USA.

The breakthrough came after a series of hard bargains at bilateral talks between a high-powered Bangladesh delegation and the Office of the United States Trade Representative (USTR), the primary agency responsible for overseeing US trade policy.

Chief Adviser of the interim government Prof Yunus hails the deal as a triumph of adept negotiations and of diplomacy. Political leaders, businesses and economists also breathed a sigh of relief following the scaling of a tariff wall.

The pared-down tariff is expected to enhance Bangladeshi exports to the US market, especially in the apparel and clothing sector, exporter sources concerned said.

The final round of discussions was held on July 29-31 in Washington, DC, close by the 1st-August cutoff time set by President Trump for signing tit-for-tat reciprocal tariffs against US trade partners.

Commerce Adviser Sk Bashir Uddin led the Bangladesh delegation. The other members of the delegation were National Security adviser Khalilur Rahman, commerce secretary Mahbubur Rahman and additional Secretary Nazneen Kawshar Chowdhury.

On the American side, Brendan Lynch, Assistant United States Trade Representative, headed the host side, along with officials responsible for trade and tariff matters, according to media reports.

The delegation left Dhaka for US on July 28 last (BD local time) to resume the third-round negotiations with the USTR to avert the jacked-up tariffs slapped on products exported to the US market from Bangladesh. They all were optimistic about securing a fairer tariff deal or rate during the last-ditch talks.

The new tariff adjustment follows an executive order signed Thursday by President Donald Trump, as per US local time, under which the US will impose new reciprocal tariffs ranging between 10 per cent and 41 per cent on a wide range of goods imported from a number countries and foreign territories.

The 20-percent reciprocal tariff on goods imported from Bangladesh would come into effect at 12:01 am (eastern daylight time), seven days after the signing of the executive order by the US President, according to the Further Modifying of The Reciprocal Tariff Rates.

According to the order, imports from India will face 25-percent tariff, while goods from Taiwan and Sri Lanka will be subject to 20-percent duty. South Africa will be hit with a 30-percent tariff rate.

Other countries affected by the decision include Pakistan (19 per cent), Afghanistan (15 per cent), Brazil (10 per cent), Indonesia (19 per cent), Malaysia (19 per cent), Myanmar (40 per cent), the Philippines (19 per cent) and Vietnam (20 per cent).

The White House has not yet clarified whether the new tariffs are permanent or part of an interim trade-enforcement measure.

The reciprocal tariff rates will get aggregated with the exiting duties for all the countries coming under the updated US tariff regime. For Bangladesh, the incidence will come to 20 per cent plus 15 per cent, equalling 35 per cent.

Businessmen, economists, politicians and commerce officials welcome the US tariff rate for Bangladesh, which effectively puts the country's exporters on an equal, or more advantageous, footing with competitors on the American market.

They term it a milestone, on hopes that the volume of exports to the US market would get a much-needed boost.

As the news flew fast into Dhaka, appreciation began to be aired from different circles concerned. The head of interim government, Prof Muhammad Yunus, said they "proudly congratulate the Bangladesh tariff negotiators on securing a landmark trade deal with the US".

Commerce officials expressed optimism that a significant reduction in tariffs would be better for the country's export sector as the US is a large export destination for Bangladesh.

The Commerce Adviser and the Commerce Secretary could not be reached through WhatsApp call for taking comments regarding the tariff issue. They are now in the US and supposed to arrive in Dhaka on August-03 afternoon (Sunday).

The trade-and-tariff package deal is reportedly bound by strings of conditions, including some cloaked in a 'Non-disclosure Agreement' signed by the two countries.

Trade gap against Washington was an explicit major reason for the tariff hike, which is being addressed by augmenting imports from the United States. Bangladesh, in the meantime, has placed an order for 25 Boeing aircraft from the US with a view to securing a fairer tariff rate from the US administration.

Earlier, Bangladesh had inked a deal to import 0.7 million tonnes of US wheat within next five years. Of the volume, in the first year, it will import 0.220 million tonnes of the grain.

According to the Bangladesh import plans -- meant for bridging the bilateral trade gap -- the cost is estimated to come to more than $3.0 billion.

A year ago, in the fiscal year 2023-24, Bangladesh's commodities worth U$7.68 billion were exported. In contrast, Bangladesh imported goods worth $2.5 billion from the country.

The largest single product imported from the United States is iron scraps or iron pieces. And the single-largest export to the US is readymade garments.

With an eye on securing good tariff rates, the commerce ministry had completed discussions with the Bangladeshi businesses, economists, and relevant ministries, for feedback ahead of the third round of negotiations with the USTR regarding the trade agreement on the reciprocal tariff.

The ministry sat with US Wheat Associates (USW), Chevron and Excelerate Energy, US Soybean Export Council (USSEC) and US Cotton Association. Also was a sitting with the American Apparel and Footwear Association (AAFA) on July 22.

More than 100 products were added to this list in the 2025-26 fiscal budget to provide the facility for not only the US but also other countries. Bangladesh has already kept tariffs on 190 products at zero to reduce its trade deficit with the United States.

On July 07 last, the Trump administration declared a plan to impose 35-percent tariff on products. To this end, US President Donald J Trump sent a letter to the Chief Adviser of the Bangladesh interim government, Muhammad Yunus. The rate was 2.0-percent lower than the initially declared 37 per cent, issued three months ago, dated April 02 last. It was supposed to take effect on April 09.

Later on April 9, the tariffs on different countries were suspended for three months. During this time, Washington gave them the opportunity to negotiate with the US the tariffs. The three-month interregnum was supposed to end on July 9.

The US administration declared that the tariffs will come into effect on August 01, 2025.

The National Security Adviser and the Commerce Adviser of Bangladesh sat in a meeting with the USTR representatives on July 03, 2025.

In the meantime, various countries completed necessary process signing bilateral agreements with the United States through negotiations.

That is why a delegation led by the commerce adviser held several meetings with the USTR. However, Bangladesh and the US could not agree on all issues in the last talks in the second round.

The third and final day of the second round of negotiations on the tariff issue between Bangladesh and the US concluded on July 11, 2025.

However, as several issues remained unresolved in the second-round tariff talks, both nations decided to continue inter-ministerial discussions.

In the final round of tariff negotiations held on July 29-31, got a better shape regarding the tariff deal, with the US conceding 20-percent reciprocal tariff rate for Bangladesh exports.

An official source says Bangladesh and the US were expected to sign a deal titled 'Agreement on Reciprocal Trade Framework'

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