Bangladesh may have signed on the dotted line, but in the trade tug-of-war with the United States, it looks like Washington came out the clear winner, as per a GTRI report. The recently announced US–Bangladesh deal offers conditional benefits for Dhaka, but at a cost that may far outweigh the gains.
Zero duty, but only on US cotton The joint statement released on 9 February 2026 says the US will cut its reciprocal tariff on Bangladeshi goods to 19% and provide zero-duty access “only for garments made with US-origin cotton and man-made fibres”.
On paper, this seems generous. In reality, it is far more restrictive.
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For a typical Bangladeshi garment, currently facing a 12% US MFN tariff, the total duty under the new deal would reach 31% (12% MFN + 19% reciprocal). If, and only if, the garment uses US fibres, the duty drops to 12%.
“While this appears to be a significant concession, Bangladesh’s export structure and its heavy dependence on non-US textile inputs mean the arrangement is likely to result in only a limited increase in garment exports to the US,” notes the GTRI report.
The numbers behind the deal Bangladesh exported $50.9 billion in garments globally in 2024, dwarfing India’s $16.3 billion. But the US is a minor player for Dhaka: just $7.4 billion of its garment exports went to America.
By contrast, the European Union accounts for over 63% ($32.3 billion) of Bangladesh’s garment trade, and that’s already duty-free, without any sourcing restrictions.
In short, Bangladesh’s garment supply chains are built to serve Europe, not the US, making the shift to US-linked fibres economically unattractive.
Supply chain reality check Bangladesh depends heavily on imported textile inputs, and the U.S. plays only a minor role. In 2024, the country imported $16.1 billion worth of fibres, yarns, and fabrics. China led the pack with $9 billion, India contributed $3.1 billion, and the U.S. supplied just $274 million.
Cotton fibre: Of the $2.5 billion imported, the U.S. supplied $255 million. India ($655 million) and Brazil ($604 million) were the major suppliers, dominating the market.
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Cotton yarn: I
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