A recent report by the Economic Policy and Business Development division has shed light on the growing impact of Trump-era tariffs on Pakistan’s trade with the United States, raising concerns over the long-term viability of key export sectors — especially textiles.
According to the report, while US products enjoy most-favored nation (MFN) status in Pakistan, the benefits are hardly reciprocal.
Pakistan currently imposes an average tariff of 10.3% on US imports, while American tariffs on Pakistani goods average slightly higher at 10.7%. Moreover, the US collects a hefty $610 million annually from Pakistani exports, in contrast to Pakistan’s modest $157 million in tariffs on US goods.
The report highlights that only 14.8% of Pakistan’s exports enter the US duty-free, while a staggering 53% face tariffs, many of them newly imposed under former President Donald Trump's trade policy. These tariffs disproportionately affect Pakistan’s textile and apparel sector, which forms the backbone of its export economy.
The analysis notes that US tariffs on Pakistani goods exceed those imposed by the European Union, increasing the tax burden on Pakistani exporters. This trend, if unchecked, could erode Pakistan’s competitive edge — especially in textiles — at a time when regional competitors like Bangladesh, Vietnam, and China are also vying for US market share.
Despite these hurdles, the report sees opportunities for Pakistan to boost exports of apparel, fabrics, food items, and sports goods, especially if it improves diplomatic engagement with Washington. The report also recommends diversifying export destinations beyond the US to mitigate trade risk and strengthen Pakistan’s global economic resilience.
In short, while Pakistan maintains an MFN approach towards the US, the imbalance in trade treatment — particularly in light of Trump-era tariff hikes — calls for strategic recalibration and targeted trade diplomacy.
Reporter: Waqas Azeem