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"The USA and Bangladesh signed a reciprocal trade deal on 9th February, 2026. Under this deal, 7,132 US commodities will get duty-free access in Bangladesh, and 2,500 Bangladeshi commodities will receive duty-free access in US markets. However, this agreement links the tariff concession for Bangladeshi garment exports with US-produced cotton or man-made fibre. To put it simply, preferential access to Bangladeshi garments will be provided if Bangladesh agrees to use US-produced cotton in its apparel production. This agreement could strengthen Bangladesh’s position in the USA market; however, it carries broader implications for Bangladesh and regional trade dynamics.
Bangladesh is one of the key markets for Pakistan’s cotton and cotton-related products. Alone in 2024, Pakistan exported $395 million worth of heavy pure cotton, heavy mixed woven cotton ($76.8 million) and heavy mixed woven cotton ($76.2 million). Since the tariff concession for garment exports is linked to the use of American cotton, the Bangladeshi manufacturers have a strong incentive to shift towards the US Market. After this agreement, Pakistan’s textile products will face enhanced competition in the US markets."
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