Dhaka Tribune | 13 August 2025
Tariff agreement to be signed upon White House approval
by Sheikh Shahariar Zaman
The principal negotiations on the US-Bangladesh reciprocal tariff reduction agreement concluded at the end of July, with the process expected to be promptly completed once the White House grants its approval.
Dhaka and Washington hope to sign the agreement within the current month.
According to a diplomatic source, mediation is underway to determine the rate under the “Rules of Origin” and this is expected to be finalized soon.
Once White House consent is obtained, both parties will sign the agreement.
“We expect this to be completed within the month,” the source added.
An additional 16% tariff on Bangladeshi exports to the United States has been in effect since August 7 while other provisions of the agreement will come into force once it is signed, the source further said.
When asked about these other provisions, the source noted: “In addition to the additional tariff, the agreement covers non-tariff barriers, intellectual property rights, labor rights, national security, rules of origin and government procurement, among other issues.”
National security
During the tariff negotiations, the United States proposed that Bangladesh reduce its imports of both military and civilian goods from China.
Bangladesh did not agree to this condition.
However, the agreement states—without naming any country—that Bangladesh will reduce imports from certain countries.
It also accepts the provision to purchase a larger quantity of military equipment from the United States.
Asked about the geopolitical implications of the agreement, a former diplomat told Bangla Tribune: “Even without naming a country, the mention of imports from certain states being reduced makes it clear which country the United States is referring to.”
Referring to Washington’s “China containment” policy, the former diplomat added: “The matter will now have to be explained to China—clarifying under what circumstances Bangladesh accepted such conditions.”
On the purchase of US military equipment, the diplomat remarked: “The quality of their products is good, but they are expensive and often come with conditions. What type of military goods Bangladesh buys from the United States will depend on its needs.”
‘Rules of Origin’
The agreement includes a provision allowing duty-free access for garments made with US cotton.
A former diplomat commented: “This is a positive development. Bangladesh has already decided to import cotton and other products from the United States. If products made with American cotton receive duty-free access, it will create stronger incentives for greater exports.”
Government procurement
The Bangladesh government annually procures various goods and services, generally through open tenders.
When the supplier is a foreign entity, certain licensing requirements apply.
The agreement includes a clause to relax these requirements.
A former diplomat explained: “Equal opportunities for all enhance the efficiency of public procurement and reduce the likelihood of complaints from specific companies or countries.”
Noting that a handful of countries dominate Bangladesh’s public procurement contracts, he said: “Due to the lack of equal opportunities, US companies often do not win—or are not awarded—contracts. The United States appears to be seeking a resolution to this issue.”
Notably, on Tuesday, the Bangladesh government decided to purchase two bulk carriers from the US firm Hellenic Dry Bulk Ventures.
The company secured the contract as the lowest bidder.