The United States has announced a new list of import tariffs impacting 70 countries, with Pakistan receiving a relatively low 19% retaliatory rate the lowest among South Asian nations included. In comparison, India faces a 25% tariff, while Bangladesh, Sri Lanka, Vietnam, and Taiwan are each subject to a 20% levy.
Experts suggest that the 19% tariff means Pakistan will incur a 19% tax on products exported to the US, providing significant support to the country’s textile sector, which constitutes about 60% of Pakistan’s total exports. The country exports a range of goods to the US, including leather products, furniture, plastics, sulfur, salt, cement, sports equipment, carpets, and footwear.
The US is the largest market for Pakistani textiles, which include cloth and towels. The new tariffs create a potential advantage for Pakistani exporters, especially against competitors like Bangladesh, which now faces higher tariffs. Former US Ambassador to Pakistan, Hussain Haqqani, noted that this tariff reduction could make Pakistani textiles slightly cheaper in the US market.
According to Profit Pakistan, Pakistan’s total exports to the US for 2024-25 are estimated at about $4.4 billion, primarily driven by textiles. In contrast, Pakistan imported approximately $2.14 billion worth of goods from the US in 2024, including raw cotton, iron and steel, machinery, and chemicals.
With Pakistan now holding the lowest US tariff rate in South Asia—initially set at 29% but negotiated down to 19% the announcement has been positively received in Pakistan. The Prime Minister expressed gratitude towards President Donald Trump for this outcome, describing it as a significant opportunity.
Finance Minister Muhammad Aurangzeb indicated that the trade agreement with the US would herald a new era of economic cooperation in sectors such as energy, minerals, IT, and cryptocurrency.
The US Embassy emphasized that this trade agreement symbolizes the ongoing partnership between the two nations and aims to strengthen trade and economic relations further.
Under the Trump administration, relations between Pakistan and the US have notably improved, with Pakistan inviting President Trump for discussions and nominating him for the Nobel Peace Prize in June.
