Bangladesh, US set to sign trade agreement this month, says adviser
Bangladesh is eyeing further tariff relief from the United States as imports of cotton, wheat, soybeans, and fuel from Washington surge, potentially reshaping trade competitiveness in its biggest export market.
Commerce Adviser Sk. Bashir Uddin on 14 September said Washington has expressed satisfaction with Bangladesh’s narrowing trade deficit with the US and may cut the existing 20% reciprocal duty if this trend continues. “We proposed reducing duties if the trade deficit declines. They assured us tariffs will be lowered accordingly. A trade agreement could be signed within this month,” Bashir told the media after meeting a US Trade Representative (USTR) delegation in Dhaka.
No fixed rate, but scope for gradual cuts
Bashir clarified that talks did not focus on a specific duty rate, such as 15%, but on a phased reduction tied to import growth. Officials hinted duties might be cut to around 18%, subject to final talks with the chief adviser and foreign adviser.
Competitor countries such as Vietnam and India are already negotiating preferential terms with the US, pushing Dhaka to secure similar advantages to protect its apparel exports.
Narrowing trade deficit
Bangladesh’s current US trade deficit stands at $6 billion, but rising imports of US cotton, soybeans, LNG, and wheat are helping to close the gap. Cotton imports alone reached $600 million last year, while $276 million worth has already been imported in just the first two months of this fiscal year.
Imports of soybeans and soybean meal from the US have also jumped past $450 million this year, compared to $348.9 million in 2024. In July, Dhaka approved an LNG purchase worth Tk600 crore and signed contracts for 150,000 tonnes of US wheat. Additionally, the Bangladesh Shipping Corporation has ordered two bulk carriers from a US firm for $76.7 million.
“By increasing imports of US cotton and energy, we can further reduce the deficit and, in turn, the duties imposed on Bangladesh,” Bashir said.
Exporters eye 15% duty target
The BGMEA and BKMEA have urged the government to push for a tariff cut to 15% or lower, which they argue would boost both US cotton sales and Bangladeshi garment exports.
BGMEA President Mahmud Hasan Khan noted that the industry is already proposing expanded cotton imports in exchange for lower tariffs, while BKMEA President Mohammad Hatem said such a move would be a “win-win” for both countries.
Draft agreement underway
Officials confirmed a draft trade agreement has already been prepared, following weeks of US Embassy engagement in Dhaka and a three-day visit by Assistant USTR Brendan Lynch. Meetings with the foreign adviser and chief adviser are scheduled to conclude negotiations.
Bangladesh hopes to finalise the deal this month, ensuring reduced tariffs and stronger bilateral trade ties.
