Reciprocal tariff deal with US allows exit with notice: Commerce adviser

Commerce Adviser Sheikh Bashir Uddin has said that Bangladesh can withdraw from the reciprocal tariff agreement signed with the United States by issuing a formal notice, should the next government choose to do so, as the deal includes an exit clause.

He disclosed the information at a press conference held at the Ministry of Commerce in the Secretariat today (10 February), a day after Bangladesh and the US signed the reciprocal tariff agreement. 

The commerce adviser said the agreement contains a provision allowing either country to withdraw, if necessary, by serving an appropriate notice. "We were mindful of the next government while negotiating the deal. If a future government feels that the agreement is not suitable for any reason, this clause allows them to exit," he said.

Commerce Secretary Mahbubur Rahman said the agreement allows withdrawal with two months' notice, adding that the deal will come into force once both countries issue formal notifications.

On 2 April 2025, the United States imposed reciprocal tariffs on several countries at varying rates to reduce its trade deficit. 

Initially, the Trump administration imposed a 37% reciprocal tariff on Bangladeshi products. After negotiations, the rate was reduced to 20% in August. Following nine months of talks, the two countries signed the agreement on 9 February, further reducing the reciprocal tariff to 19%.

Under the agreement, Bangladesh's main export item -- ready-made garments -- will enjoy zero reciprocal tariff if produced using US-origin cotton and man-made fibres.

At the press conference, the commerce adviser said Bangladesh exports goods worth around $8 billion to the US, and has a trade surplus of $6 billion. Overall, he said, the 19% reciprocal tariff will apply to only around 10% of Bangladesh's exports.

Noting that the US economy is worth $36 trillion, the adviser said its import demand is enormous, creating vast export opportunities for Bangladesh.

He also noted that Bangladesh imports agricultural products such as wheat, maize, and oilseeds worth around $15 billion annually, adding that the notion that Bangladesh is fully self-sufficient in food is incorrect.

Commerce Secretary Mahbubur Rahman said the US has introduced a tariff benefit called "Potential Tariff Adjustment for Partner Countries," which will take effect on the day the agreement comes into force. This benefit will apply to partner countries that have signed reciprocal tariff agreements with the US.

Under the scheme, the US has granted duty-free benefits on more than 2,500 items. Among products Bangladesh produces, pharmaceuticals top the list, meaning all medicines and pharmaceutical raw materials will enjoy duty-free access. Other eligible items include certain plastic products, aircraft parts, plywood, particle boards, agricultural products, and fishery items.

The commerce adviser said the agreement will significantly benefit the textile, spinning, and weaving sectors by enabling double-stage transformation. He added that while Bangladesh had pursued a free trade agreement (FTA) with the US, Washington was not interested in signing one.

The commerce secretary said the agreement initially did not include enforcement or exit clauses, but Bangladesh successfully negotiated their inclusion. 

Responding to a question on whether the agreement includes provisions requiring Bangladesh to reduce imports from third countries or meet additional US demands, the commerce adviser said no such conditions were included.

The commerce secretary added that while such issues were initially raised, Bangladesh refused to accept them. "We made it clear during negotiations that we could not include any provisions that would create sensitivity or discrimination against other countries," he said.