The United States and Bangladesh formalized a historic Agreement on Reciprocal Trade (ART), anchored by a massive $15 billion energy partnership. This 15-year commitment marks a significant pivot in South Asian geopolitics, as the interim government in Dhaka, led by Chief Adviser Muhammad Yunus, strengthens economic ties with the Trump administration.
The deal is designed to solve Bangladesh’s chronic industrial energy shortages while securing a long-term export pipeline for American natural gas and refined fuels.
The $15 Billion Energy Pipeline
The cornerstone of this agreement is a long-term supply chain for American energy products, specifically Liquefied Natural Gas (LNG), to fuel Bangladesh’s massive textile and industrial hubs.
Duration & Scale: An estimated $15 billion in purchases over the next 15 years.
Key Players: The deal includes a transformative agreement with Louisiana-based Argent LNG for up to 5 million metric tons of LNG annually, directly supporting the “Drill, Baby, Drill” energy mandate.
Infrastructure: The partnership also covers the modernization of Bangladesh’s power grid and the integration of U.S. technology in natural gas distribution.
Trade Reciprocity: The 19% & 0% Tariff Mechanism
While the energy deal secures Dhaka’s power needs, the trade provisions offer a critical lifeline for Bangladesh’s export-driven economy.
| Trade Provision | Details |
| General Tariff Rate | Reduced from 20% to 19% (down from a 37% peak in 2025). |
| Zero-Tariff Quota | A new mechanism allows certain textile and apparel goods to enter the U.S. at 0% duty. |
| The “Cotton Rule” | To qualify for zero tariffs, goods must be manufactured using U.S.-produced cotton or man-made fibers. |
| Market Access | Bangladesh will remove VAT and digital taxes on U.S. ICT, chemicals, and medical devices. |
Geopolitical & Industrial Impact
This agreement goes beyond energy, encompassing a wide-scale industrial and agricultural reset.
Aviation & Agriculture: Alongside energy, Bangladesh plans to procure 14 Boeing aircraft (valued at ~$3B) and purchase $3.5 billion in American agricultural products like wheat, soy, and corn.
The “India Factor”: Analysts note that this deal effectively reverses the tariff advantage India briefly held over Bangladesh in early February, giving Dhaka a competitive edge in the U.S. garment market.
Strategic Shift: Bangladesh has also committed to purchasing U.S. military equipment and limiting acquisitions from specific rival nations, signaling a clear shift toward Washington in South Asian defense strategy.
“Today’s signing is a meaningful step forward in opening markets and creating new opportunities for American exporters. Bangladesh is the first South Asian nation to finalize a reciprocal trade agreement of this scale.” — U.S. Ambassador Jamieson Greer, February 10, 2026
