Washington Extracts Its Pound of Flesh from Dhaka

The United States–Bangladesh Joint Statement of February 9, 2026 says the US will cut its reciprocal tariff on Bangladeshi goods to 19% and offer zero reciprocal tariff on garments made using US-origin cotton and man-made fibres.

In practical terms, a Bangladeshi garment that normally faces a 12% US MFN tariff would attract a total duty of 31% (12% MFN + 19% reciprocal). For India, the comparable total would be about 30% (12% MFN + 18% reciprocal). But Bangladeshi garments made with US fibres would avoid the reciprocal duty, paying just the 12% MFN tariff.

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 U.S.

In 2024, Bangladesh exported $50.9 billion worth of garments globally, much higher than India’s $16.3 billion.

Over 63%, or $32.3 billion, of Bangladesh’s garment exports went to the European Union, duty-free.  About $7.4 billion value of garments went to the US, where Bangladeshi garments have faced an average MFN tariff of about 12% since US GSP benefits were withdrawn in 2019. Because the EU—not the US—is Bangladesh’s main market, its garment supply chains are built to serve European buyers, and unlikely to change to meet conditional US sourcing rules.

Bangladesh’s garment industry depends heavily on imported textile inputs for making garments. In 2024, it imported $16.1 billion worth of fibres, yarns, and fabrics. China supplied about $9 billion, India supplied $3.1 billion, while the US supplied just $274 million.

At the product level, the mismatch is even clearer.

Bangladesh imported $2.5 billion of cotton fibre, mainly from India ($655 million) and Brazil ($604 million), with US cotton accounting for only $255 million.

Imports of cotton yarn were $1.8 billion, of which India alone supplied $1.6 billion.

For fabrics—the most important input for garment making—China dominates. Of $1.4 billion in woven synthetic filament fabric imports, China supplied $1.1 billion, while the U.S. supplied only $88 million.

Of $1.3 billion in woven cotton fabric imports, China supplied $601 million and India $194 million. The pattern is the same for synthetic filament yarn: $329 million from China out of a total $442 million, compared with $53 million from India.

High share of yarn and fabrics as inputs for making garments compared to fibres show that an estimated less than one-third of Bangladesh’s garments are made starting from fibre. Most are made using imported yarn and fabric, not raw fibre. The US supplies Bangladesh almost entirely with raw cotton, and only in limited quantities, while India and China supply the yarns and fabrics that actually keep Bangladeshi garment factories running. To qualify for zero tariffs, Bangladesh would have to replace long-established suppliers and invest heavily in new spinning and fabric-processing capacity, which it currently lacks.

Since the EU absorbs nearly two-thirds of Bangladesh’s garment exports and already offers unconditional zero-tariff access, the incentive to restructure supply chains mainly for the US market is weak. As a result, the US zero-tariff offer for garments made with American fibres is likely to lead only to marginal increases in Bangladesh’s garment exports to the United States, and is more likely to boost US cotton exports than transform Bangladesh’s apparel exports to the US market.

Bangladesh has conceded many time more than it is likely to gain. In exchange for a narrow and conditional promise of zero-duty access for garments made with US fibres, Bangladesh has agreed to open its market widely to United States industrial and agricultural exports—machinery, chemicals, energy goods, soy, dairy, beef and cotton—while also committing to buy about $3.5 billion of US farm products, undertake long-term purchases of US energy and aircraft, and rely more heavily on US cotton as both an import and a gatekeeper for apparel access.

On top of this, Bangladesh has accepted extensive compliance obligations on labour standards, forced-labour bans, customs digitisation, cross-border data flows and intellectual-property enforcement, effectively giving Washington deep monitoring and enforcement leverage over its export sector.

For an industry structurally dependent on Asian yarns and fabrics, the zero-duty carrot is hard to use at scale, making the trade-off lopsided. As the costs of these commitments become clearer and the export gains remain modest, Bangladesh is likely to regret the imbalance built into this deal.