Hit by 37% tariff, Bangladesh's Yunus offers to buy cotton, farm goods duty-free from US
Dhaka: Bangladesh has proposed a wide-ranging trade package to the United States, including duty-free access for US agricultural goods such as cotton, in an effort to stave off steep reciprocal tariffs on its own exports, media reports said.
The offer was made through a letter from Chief Adviser Muhammad Yunus to US President Donald Trump, according to an Indian Express report.
Yunus has requested a three-month deferral of the tariff measure, while proposing initiatives such as opening Bangladesh’s advanced tech sectors — including civil aviation and defence — to American companies and facilitating the launch of Elon Musk’s Starlink in the country.
Textile sector reels under 37% reciprocal tariff
Bangladesh, the world’s second-largest exporter of ready-made garments after China, has been hit by a 37% reciprocal US tariff — a move seen as particularly damaging for smaller economies due to the way such duties are calculated.
The textile sector, which serves as the country’s largest foreign exchange earner, has been especially impacted.
Other major garment-exporting nations like Vietnam and Cambodia have also sought similar arrangements with the US to cushion the blow from such measures.
India, which exports more than $2 billion worth of cotton and yarn to Bangladesh each year, has significant interests in the country’s textile sector.
Several Indian companies operate manufacturing facilities in Bangladesh to take advantage of the preferential duty regime extended by the European Union to Least Developed Countries (LDCs).
Bangladesh opens market, pledges support to US agenda
In the letter, Yunus affirmed Bangladesh’s willingness to align with the US trade strategy.
“I write to assure you that we in Bangladesh will take all necessary actions to fully support your trade agenda,” he said, adding that his government had already sent a high-level envoy to Washington after Trump’s inauguration to signal its intent to expand American exports to its 170-million-strong consumer market.
Tariff cuts, warehouse plans for US cotton
Yunus outlined several initiatives aimed at smoothing US-Bangladesh trade ties, including setting up a bonded warehousing facility in Bangladesh to ensure quicker access for US cotton — duty-free.
He also said Bangladesh imposes the lowest tariffs on most US goods among South Asian nations and remains committed to maintaining zero tariffs on key American exports like scrap metals and agricultural products.
He added that Dhaka is working on halving duties on major US exports such as gas turbines, semiconductors, and medical equipment.
Non-tariff barriers to be scrapped
The letter also detailed Bangladesh’s efforts to remove non-tariff obstacles, such as eliminating redundant testing mandates and rationalising packaging, labelling, and certification norms.
Simplified customs and other trade facilitation measures are also being introduced.
Starlink, tech sector entry offered to US firms
Highlighting deeper engagement with US businesses, Yunus said Bangladesh is preparing for the rollout of Starlink and has taken steps to open up sectors like defence and civil aviation to American companies.
“We will complete the ongoing and planned actions within the next quarter. Please allow us the necessary time to implement this important work smoothly, in consultation with US officials,” the letter concluded.
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