Bangladesh has secured exemptions for some clothes and textiles that are made with US-produced materials, as part of a new agreement announced on Monday.
As part of the deal, Washington will also cut its tariffs on Bangladesh from 20% to 19%, in exchange for Dhaka to open its markets to a wider range of American goods.
The apparel industry forms the backbone of Bangladesh, which is the world's second largest exporter of clothes after China.
The South Asian country has been in long-drawn talks with the White House after President Donald Trump imposed sweeping tariffs on global trading partners in April last year.
The White House stated that the agreement will strengthen the countries' economic ties and offer both unprecedented access to each market.
The US will lower its tariff rate on Bangladesh and will also identify certain clothing and textile goods from the country to enter the US free of tariffs, including those produced with American cotton and man-made textiles.
The clothing sector accounts for more than 80% of Bangladesh's total export revenue and employs around four million workers.
In exchange, Bangladesh has agreed to provide significant preferential market access to a host of American agricultural and industrial goods. This includes opening markets to more US chemicals, medical devices, car parts, soy products, and meat.
Bangladesh has also committed to adhering to US food and drug safety regulations and vehicle safety and emission standards to facilitate easier entry of US goods into the country.
The country is set to hold general elections on Thursday amid a transitional government since 2024.
The US's newly announced tariff cut positions Bangladesh nearly parallel to India, which is subject to an 18% levy from the US, marking a significant step in the competition between these South Asian nations in clothing and agriculture exports.
