Bangladesh to Boost US Defence Imports Under New Trade Deal

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Bangladesh will be required to increase imports of defence equipment from the United States under a newly signed bilateral trade agreement, while limiting military purchases from certain other countries.

Signed on 9 February, the agreement lowers Bangladesh’s reciprocal tariff rate with the US to 19%. In return, Bangladesh gains zero tariffs on readymade garments exported to the US, provided they are made using American cotton or man-made fibres.

The agreement states that Bangladesh “shall endeavor to increase purchases of US military equipment and limit military equipment purchases from certain countries.” While the publicly released version does not specify which countries are affected, a draft had indicated a reduction in defence imports from China.

Beyond defence procurement, the deal outlines broader trade commitments. Over the next 15 years, Bangladesh is expected to import more than $15 billion worth of liquefied natural gas (LNG) from the US. The agreement also calls for increased imports of American automobiles and auto parts.

In aviation, Bangladesh has agreed to purchase 14 Boeing civil aircraft with related parts, and the deal leaves open the possibility of additional acquisitions in the future.

The agreement also requires Bangladesh to submit a full notification of all subsidies it provides to the World Trade Organization (WTO) within six months of the deal taking effect.