Trump imposes 20% tariff on Bangladesh following intense negotiations

Bangladesh Secures Tariff Reduction to 20% After High-Stakes Talks with U.S.

In a major diplomatic breakthrough, Bangladesh has successfully negotiated a reduction in U.S. tariffs—from the initially announced 35% to a revised 20%—following a series of high-level negotiations in Washington.

The White House confirmed the revised rate today, marking a significant reversal of President Donald Trump’s July 8 directive, which had imposed a blanket 35% tariff on all Bangladeshi exports to the U.S. That earlier decision had raised alarm over its potential impact on Bangladesh’s export-reliant economy, especially the garment industry.

The breakthrough came after the third and final round of negotiations between Bangladeshi officials and the Office of the United States Trade Representative (USTR) concluded last night in Washington, D.C.

The Bangladeshi delegation—led by Commerce Adviser Sk Bashir Uddin, National Security Adviser Khalilur Rahman, Commerce Secretary Mahbubur Rahman, and Additional Secretary Nazneen Kawshar Chowdhury—engaged in a three-day dialogue aimed at softening the proposed tariff hike and restoring trade parity.

As part of efforts to address the longstanding trade imbalance, Bangladesh submitted a formal proposal outlining a roadmap to reduce the gap. Among the key concessions offered, Dhaka pledged to purchase 25 aircraft from Boeing, 700,000 tonnes of wheat, as well as U.S.-origin LNG, cotton, pharmaceuticals, capital machinery, chemical raw materials, and agricultural products.

According to USTR figures, bilateral trade reached $10.6 billion in 2024, with Bangladeshi exports to the U.S. accounting for $8.4 billion—up 1.1% year-on-year—while U.S. exports to Bangladesh fell slightly to $2.2 billion. This widened the U.S. trade deficit with Bangladesh to $6.2 billion.

In April 2025, the U.S. had initially imposed a steep 37% duty on Bangladeshi goods, which was later revised to an additional 10% after a 90-day suspension. The final agreement to lower the tariff to 20% is being hailed as a diplomatic win for Bangladesh and is expected to help stabilise bilateral trade flows.

The Boeing deal, signed on July 27, is widely seen as a strategic move by Bangladesh—not only to help offset the trade imbalance but also to deepen its economic and geopolitical ties with Washington.