ISLAMABAD – US President Donald Trump slapped world with a reciprocal tariff plan – a bold move that sent shockwaves across different financial markets but Pakistan is planning strategic response to US Tariffs, focusing on export potential.
As Trump led, the administration claimed new import taxes aimed to cut trade deficits and bring foreign manufacturing back to America. In response to recent imposition of reciprocal trade tariffs by US, Prime Minister Shehbaz Sharif established a dedicated working group to analyze the situation and propose policy responses.
The group will conduct in-depth review of trade dynamics and seek ways to mitigate the impact of the 29% tariffs on Pakistan’s exports.
The move comes as local business community expresses both concern and cautious optimism. Pakistan’s textile industry, which makes up bulk of country’s exports to US, is particularly affected.
With plethora of concerns, those familiar with development see opportunities in new tariff regime. It also created a potential opportunity for Pakistan, as it could attract US buyers looking for cheaper alternatives to avoid these higher tariffs.
Pakistan’s textile exports in FY24 totaled $16.7 billion, with $14 billion coming from value-added products, indicating significant untapped potential in the sector.
US leather and footwear market is currently affected by tariffs on other suppliers, and represents another potential growth area for South Asian nation. With exports heavily concentrated in the textile sector, any significant change in global demand or a potential economic slowdown could affect jobs, foreign exchange reserves, and industrial growth in Pakistan, according to the Ismail Iqbal Securities report.
The government is closely collaborating with the business community to develop a comprehensive policy response aimed at protecting and sustaining Pakistan’s access to the US market, ensuring that the country’s exports remain competitive in the face of rising tariffs.
Trump Tariffs: What is at stake for Pakistan’s Export Economy?
