Bangladesh’s garment industry is pfor a major export breakthroughoised in the United States following the signing of the landmark Agreement on Reciprocal Trade (ART).
Under the new agreement, the general reciprocal tariff on Bangladeshi exports has been reduced from 20 percent to 19 percent. However, the most significant gain lies in a specialized ‘zero-duty’ clause:
Apparel manufactured in Bangladesh using US-sourced cotton or man-made fibers will be exempt from the 19 percent reciprocal tariff. Experts say it will unlock unprecedented opportunities in Bangladesh’s largest single export market, where RMG comprises over 80% of the basket.
BGMEA welcomes landmark Bangladesh–USA tariff agreement
This effectively brings the reciprocal duty down to ‘zero’ for these products, providing a massive cost advantage for Bangladeshi exporters over regional competitors.
The United States is the primary destination for Bangladeshi apparel, currently absorbing nearly 19 percent of the country’s total garment exports. Data from the Office of Textiles and Apparel (OTEXA) of USA highlights the scale of this potential:
From January to November 2025, the US imported $7.6 billion in apparel from Bangladesh. Of this, $5.18 billion consisted of cotton-based products.
Analysts suggest that by pivoting to US cotton, Bangladesh can convert a significant portion of its current $8 billion annual export volume to the US into duty-free shipments, drastically increasing its market share.
The agreement also targets the high-growth non-cotton (synthetic) segment. Currently, non-cotton products account for roughly 30 percent of Bangladesh’s total US exports. With the ART providing incentives for using US-produced man-made fibers, Bangladesh has a golden opportunity to expand into high-value categories like active wear and technical outerwear, where demand in the American market is surging.
“This agreement marks a new height in our economic relations,” said Sheikh Bashir Uddin, Bangladesh’s Commerce Adviser.
"It not only lowers trade barriers but also solidifies Bangladesh’s position as a premier, high-value partner in the global supply chain," he said.
Agreement grants zero tariff access for Bangladeshi RMG using American cotton into US market
Industry leaders believe the deal will encourage local spinning mills to integrate more American raw materials to capitalize on the zero-tariff route. As Bangladesh works toward a total global garment export target of nearly $39 billion, the US market—bolstered by these new preferential terms—is expected to remain the cornerstone of the country's economic growth.
Faisal Samad, Director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), emphasized that this new trade arrangement creates vital opportunities for the Ready-Made Garment (RMG) sector.
"This agreement creates significant new potential, particularly for products manufactured using US cotton and man-made fibers," Samad stated.
He noted that the provision to reduce or eliminate duties on apparel made from US-sourced fibers would directly enhance Bangladesh's competitiveness, leading to a substantial positive impact on export growth.
Echoing this sentiment, Engineer Rajib Haider, former Director of the Bangladesh Textile Mills Association (BTMA), highlighted the benefits for the primary textile sector.
He remarked that the opportunity to gain additional tariff exemptions by using US cotton to produce yarn and fabric locally would strengthen Bangladesh’s position in the global supply chain.
"If we can leverage these tariff concessions by integrating US cotton into our production, it will create a highly positive outlook for both our textile and clothing industries," Haider added.