Washington DC - The US and Bangladesh unveiled a deal Monday to lower US tariffs on goods from the world's second-biggest garment manufacturer, with Washington also committing to work towards duty exemptions for certain textiles and apparel.

Under the agreement, President Donald Trump's administration is set to trim US "reciprocal" tariffs on Bangladesh products from 20% to 19%, said a joint statement released by the White House.

Such "reciprocal" duties were imposed by Trump last year to address trade imbalances or practices Washington deemed unfair.

Trump had initially set a tariff rate of 37% on Bangladesh goods, as he targeted dozens of other economies with sweeping duties, too. He eventually reduced the tariff rate for Bangladesh products to 20% in August.

Textile and garment production makes up about 80% of exports in Bangladesh, and the industry has been rebuilding after it was hit hard in a student-led revolution that toppled the government in 2024.

With the new deal, Washington "commits to establish a mechanism that will allow for certain textile and apparel goods from Bangladesh to receive a zero reciprocal tariff rate."

This means that certain volumes of such imports can receive preferential treatment.

But the volume will be related to the quantity of US textile exports to the country, such as US-produced cotton and man-made fiber inputs.

Beyond textiles, the US will also identify other products that may receive a 0% "reciprocal" tariff.

The agreement was signed on Monday and will be operational once both sides issue notifications, said a statement on social media by Muhammad Yunus, who leads Bangladesh's interim government.

Bangladesh's National Security Adviser Khalilur Rahman added, according to the statement, that the expected tariff exemptions for textile and apparel exports using US inputs "will give substantial added impetus to our garments sector."

Bangladesh exported around $8.4 billion worth of goods to the US in 2024, while its US imports amounted to $2.2 billion, according to the Bangladesh Bank and the National Board of Revenue.

US clothing companies that source products from Bangladesh range from Fruit of the Loom to Levi Strauss to VF Corp – whose brands include Vans, Timberland, and The North Face.