Pakistan May Lose $564 Million in Exports If US Tariffs Remain
Pakistan’s exports are threatened with new tariffs from the United States under the trade policy of former President Donald Trump. Based on a report from Islamabad-based think tank Tabadlab, the nation may experience a loss of $564 million in exports by the fiscal year 2025-26.
The new US tariffs on Pakistani products are up to 29%. Trump, however, recently suspended the tariffs for 90 days. He explained that the suspension followed over 75 countries, including Pakistan, approaching him to talk about the matter and not taking any action against the US in return.
Although delayed, the threat is still real. A high-ranking government official from Pakistan’s Ministry of Commerce confirmed that a government delegation will visit Washington shortly to hold discussions. The objective is to negotiate and minimize the effect of the new trade regulations.
The clothing sector, which accounts for over half of Pakistan’s exports to the US, will be hardest hit. US consumers are price-sensitive, and if tariffs remain, demand for Pakistani goods might decline by at least 13%. In the worst-case scenario, the nation might lose as much as $2.17 billion in exports.
The report cautioned that these tariffs would reverse recent gains in Pakistan’s export growth. This would impact the stability of the country’s economy and make its financial situation even tougher.
Currently, Pakistan exports approximately $6.3 billion worth of products to the US annually. Losing even a fraction of this would be a significant blow as the country strives to strengthen its economy and deal with foreign debts.
In 2024, Pakistan imported $1.87 billion of goods from the US, which accounted for only 4% of its overall imports. Some of the key US exports to Pakistan are medicines, machinery, and steel. But Pakistan does not earn much tariff revenue from these products, just around $85 million, with an average tariff rate of 4.5%.
Conversely, the Trump administration asserts that Pakistan imposes as much as 58% tariffs on US goods — although analysts argue that the figure is calculated on a misleading basis.
Pakistan grants zero tariffs to US cotton and low duties on items such as scrap metal and medical instruments. This implies that Pakistan does not have many choices to retaliate with similar tariffs in negotiations.
Other nations, such as Bangladesh and Vietnam, are also being subjected to similar or even greater US tariffs. But Vietnam has already made swift diplomatic efforts to safeguard its trade interests. Experts opine that Pakistan should also do the same and concentrate on increasing services exports, which are not impacted by tariffs at present.
