Bangladesh has secured a reduced 19 percent tariff rate with the United States under a trade agreement signed between the two countries, granting exemptions for some textiles and garments manufactured with US material.

The trade deal was announced on Monday.

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Muhammad Yunus, the chief adviser heading Bangladesh’s interim government, said Washington had “committed to establishing a mechanism for certain textile and apparel goods from Bangladesh using US-produced cotton and man-made fibre to receive zero reciprocal tariff in [the] US market”.

The White House said Bangladesh had agreed to provide significant preferential market access for US industrial and agricultural goods, including chemicals, medical devices, machinery, motor vehicles and parts, soya products and dairy goods, beef, poultry, tree nuts and fruit.

Bangladesh will also ease non-tariff barriers by accepting US vehicle safety and emissions standards, recognising US Food and Drug Administration certifications, and removing import restrictions on remanufactured goods, the White House added.

The nations also noted recent and upcoming commercial deals including aircraft procurement, around $3.5bn in purchases of US agricultural products, and an estimated $15bn in US energy product purchases over 15 years.

Yunus said the agreement followed nine months of negotiations that began in April last year.

Bangladesh also pledged to uphold internationally recognised labour rights and strengthen environmental protections.

The South Asian nation in August had secured a reduction in US tariffs on its exports to 20 percent, down from 37 percent initially proposed by Washington, offering much-needed relief to the nation’s apparel exporters.

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The ready-made garments sector is the backbone of Bangladesh’s economy, accounting for more than 80 percent of total export earnings, employing about four million workers and contributing about 10 percent to gross domestic product.

At the 19 percent tariff rate, Bangladesh will compete comfortably with next-door neighbour India, for which the tariff rate has been set at 18 percent, down from a crippling 50 percent. Both countries make clothing and footwear for clients in the US. When the first round of tariffs was announced on April 2, India had been slammed with 25 percent while Dhaka had been given a much stiffer 37 percent. At the time, Bangladeshi manufacturers feared that they would lose clients to the Indian market. Now both are on an equal footing.

Bangladesh goes to the polls on Thursday to elect new leadership after being governed by an interim government since August 2024, when ousted former Prime Minister Sheikh Hasina fled to India, where she remains.