Dhaka-Washington set to sign reciprocal tariff deal 3 days before nat’l polls

Bangladesh and the United States (US) are set to sign a bilateral trade agreement on February 9 in Washington to resolve reciprocal tariff issues, just three days before the national election.

Commerce Secretary Mahbubur Rahman confirmed the information on Sunday while speaking to reporters at the Ministry of Commerce in Dhaka. Bangladesh has received a tentative date for signing a mutual trade agreement with the US to address Washington’s reciprocal tariff regime imposed on country’s exports, he said.

“We have sent a summary seeking approval to finalize the draft agreement and sign it on that date. The final decision will be taken later,” he said.

The agreement follows a series of negotiations after the US, under President Donald Trump, initially announced reciprocal tariffs of 37 percent, later revised to 35 percent, on Bangladeshi goods.

After three rounds of talks in Washington, the rate was reduced to 20 percent on July 31, subject to Bangladesh making several concessions, including commitments to narrow the bilateral trade deficit.

Asked whether the tariff rate could be lowered further, the commerce secretary said Bangladesh currently faces a 20 percent reciprocal tariff, similar to many other countries, while some face even higher rates. “We are hopeful that the rate may be reduced further, but nothing can be confirmed until the final decision is made before February 9,” he said.

Commerce ministry officials said Bangladesh has offered multiple concessions in return for improved market access. Although the US cut the tariff rate to 20 percent last August, no formal agreement was signed at the time. Since then, Dhaka has continued negotiations to further reduce the tariff and secure duty-free access for garments made from US-origin cotton, which is now expected to be formalized in the upcoming agreement.

Responding to concerns over India’s recent free trade agreement with the European Union, Mahbubur Rahman said Bangladesh has no reason to be worried, citing its four-and-a-half decades of experience and strong global standing in the garment sector. “Bangladesh is the world’s second-largest apparel exporter with one of the strongest industrial infrastructures. This capacity cannot be replicated overnight,” he said.

On Bangladesh’s post-LDC graduation strategy, he said the government is actively pursuing free trade agreements with multiple partners to offset the loss of existing trade preferences. Negotiations with Japan have been completed, and the FTA is scheduled to be signed on February 6. Talks with South Korea have concluded their second round, with an agreement expected within this year. Proposals have also been sent to the European Union and other key markets where Bangladesh currently enjoys duty-free access.

Regarding preparations for Ramadan, he said the government has reviewed market supply and price trends of essential commodities, noting that the overall situation this year appears stable.

On aircraft procurement from the United States, the commerce secretary said discussions with Boeing are ongoing over delivery timelines, pricing, and aircraft configurations to expand Bangladesh’s aviation capacity. He clarified that military aircraft are not part of the trade negotiations, as defense procurement does not fall under trade agreements.

Addressing export performance, Mahbubur Rahman said global trade has faced a 3.7 percent contraction over the past six months, while Bangladesh’s export decline stood at 1.6 percent, which he described as relatively moderate in the global context.

According to official data, Bangladesh has been seeking duty-free access for garments made from US cotton for several years. To help narrow the trade deficit, cotton imports from the US have already increased. The Bangladesh Textile Mills Association reported that cotton imports from the US rose to $346 million in fiscal year 2024–25 from $278 million the previous year. Meanwhile, the Export Promotion Bureau noted that the United States remains Bangladesh’s largest single export destination.

Bangladesh has pledged to reduce its nearly $6 billion trade deficit with the US by increasing imports from the American market by $1.5 billion over the next 12 to 18 months. The government also plans to purchase 25 Boeing aircraft in the coming years, at an estimated cost of Tk 50,000 crore, import 700,000 tonnes of wheat annually for five years, and boost imports of military equipment, civilian aircraft parts, energy products, edible oil, wheat, cotton, and liquefied natural gas under long-term agreements.