US Cuts Tariffs on Bangladesh Goods, Exempts Some Apparel

The US is moving to reduce its so-called reciprocal tariff on goods from Bangladesh and offering a new exemption for textile products, the White House said Monday, in the latest adjustment for the South Asian country.

President Donald Trump will lower the country’s overall reciprocal tariff to 19 percent, after previously slashing the rate from 37 percent to 20 percent last year. But the deal also includes a mechanism that allows certain textile merchandise to receive a full exemption from the levies, providing a break to Bangladesh’s apparel industry.

The mechanism will apply to “certain textile and apparel goods from Bangladesh using U.S.-produced cotton and man-made fiber,” interim Bangladesh leader Muhammad Yunus said in a social media post.

The exemption will benefit Bangladesh, the world’s second-largest garment exporter after China. The sector accounts for more than 80 percent of the country’s total exports and about 11 percent of the gross domestic product. A key driver of poverty reduction, the industry employs about four million people, the vast majority of them women.

“It will benefit us in terms of reduced duties, and we had previously initiated an effort to use US cotton. Now, we will increase its use further, which will boost our exports,” said A.K. Azad, Chairman of Ha-Meem Group, a major garment maker that sends about 82 percent of its output to the US and supplies brands including American Eagle, Gap Inc, Abercrombie & Fitch, Levi’s, JCPenney and Kohl’s.

The agreement will see Dhaka provide preferential market access to US industrial and agricultural goods, including chemicals, medical devices, auto parts, energy and farm products. The nation also is committing to address some of its non-tariff barriers limiting US sales, including by accepting vehicles that comply with US regulations and pharmaceuticals that have received US government authorisations.

Bangladesh also agreed to environmental, labor and intellectual property protections.

“The Agreement will provide U.S. and Bangladeshi exporters unprecedented access to each other’s respective markets,” the White House said in a statement.

The White House also said it anticipated upcoming commercial deals between the two countries that include the procurement of aircraft, purchase of $3.5 billion in US agricultural products, and a $15 billion energy purchase over the next 15 years.

The deal is the latest in a spate of trade agreements hammered out between the US and other countries, including India and Argentina.

By Jennifer A. Dlouhy and Arun Devnath

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