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Pakistan’s exports to the United States, valued at nearly $6 billion, now face uncertainty due to the latest reciprocal tariff adjustments announced by US President Donald Trump. The revised tariff structure raises duties on Pakistani imports to 29%, a steep increase from the previous concessionary rates of around 4-5% under the Generalized System of Preferences (GSP).
This sudden tariff hike will make Pakistani goods significantly more expensive for American consumers. However, despite the added costs, Pakistan may still maintain a competitive edge over several Asian peers. The new tariff structure places Vietnam (46%), Indonesia (32%), Cambodia (49%), China (54%), and Bangladesh (37%) at a greater disadvantage. On the other hand, Pakistan lags behind competitors like India (26%), Turkey (10%), and Jordan, Egypt, and Central American nations (23%).
| Country | Tariffs Charged to the U.S.A. | U.S.A. Discounted Reciprocal Tariffs |
|---|---|---|
| China | 67% | 34% |
| European Union | 39% | 20% |
| Vietnam | 46% | 23% |
| Taiwan | 64% | 32% |
| Japan | 46% | 24% |
| India | 52% | 26% |
| South Korea | 50% | 25% |
| Thailand | 72% | 36% |
| Switzerland | 61% | 30% |
| Indonesia | 64% | 32% |
| Malaysia | 48% | 24% |
| Cambodia | 97% | 49% |
| United Kingdom | 10% | 10% |
| South Africa | 60% | 30% |
| Brazil | 10% | 10% |
| Bangladesh | 74% | 37% |
| Singapore | 10% | 10% |
| Israel | 10% | 10% |
| Philippines | 34% | 17% |
| Chile | 10% | 10% |
| Australia | 10% | 10% |
| Pakistan | 58% | 29% |
| Turkey | 10% | 10% |
| Sri Lanka | 88% | 44% |
| Colombia | 10% | 10% |
The long-term impact of this tariff adjustment will depend on individual trade negotiations, but a decline in exports to the US appears inevitable. Among the hardest-hit nations in Asia are Cambodia, facing a 49% duty, Vietnam at 47%, and Myanmar at 44%, which is still recovering from a powerful earthquake. Lesotho, a small African country, faces the highest tariff at 50%, drawing attention after former US President Trump once described it as a place “nobody has ever heard of.”
Pakistan’s textile and clothing sector, which dominates its exports to the US, is expected to be hit the hardest. In 2023, the country exported $5.01 billion worth of goods to the US, with textiles forming the bulk. Key product categories include miscellaneous textiles ($3.87 billion), knit or crochet clothing ($785.8 million), leather apparel and accessories ($591.8 million), and cotton-related products ($1.03 billion). The 29% tariff hike could challenge Pakistan’s ability to compete with lower-cost alternatives in the American market.
However, there is a silver lining. Countries such as Vietnam, Bangladesh, and Sri Lanka face even higher tariff rates, potentially giving Pakistan a relative advantage if these nations struggle to meet demand due to rising costs. Meanwhile, Turkey and certain Far Eastern nations may capitalize on the market disruption based on their production capacity and trade adaptability.
Critics on social media have questioned the methodology behind Trump’s tariff calculations, calling them flawed and arbitrary. The new rates reportedly stem from a formula that divides the US trade deficit with a country by its total exports to the US, leading to questionable figures such as a non-existent 64% tariff on Indonesian goods. Additionally, the system does not consider the US’s significant services trade surplus, further distorting the rationale behind the tariffs.
With rising import costs, American consumers may explore alternative suppliers or shift to domestic production where possible. However, for essential goods with limited substitutes, US buyers will likely bear the burden of higher prices. Pakistan’s textile industry, already struggling with economic challenges and energy costs, now faces an even tougher battle to sustain its foothold in the US market.
While Trump’s tariffs pose new challenges, they also present potential opportunities. With Bangladesh facing an even steeper duty, Pakistan may still retain a competitive edge in specific product categories. The country may also look to diversify its supply routes, possibly increasing trade partnerships with China and Iran to mitigate the impact of US tariff policies. More clarity on trade strategies is expected in the lead-up to Pakistan’s federal budget for 2025-26.
