The United States has introduced mutual tariffs for different countries, including Pakistan to control the trade deficit and revive its manufacturing sector, which some of some are a threat to their exports, while another looks at it as an opportunity to increase their exports.
Pakistan is one of the countries that does not consider the customs war released by US President Donald Trump, as a threat rather takes it as an opportunity to improve its export of textile products to the world’s largest market.
Pakistan’s most important exports are clothing and home textiles-over 70-80% of the country’s total exports to the United States. Banlgadesh and China are the most important competitors in Pakistan in this area, and these two countries also faced higher tariffs that, according to experts, would open up opportunities for Pakistan.
Trump announced the introduction of 29% duties on Pakistani goods along with 26% on imports from India, 37% on Bangladesh, 44% on Sri Lanka and 46% on Vietnam. Furthermore, a traction between the US and China can also open roads to Pakistani products such as corn, meat and sporting products.
By 2020, US imports of $ 2.4 were raised and rose to $ 3.3 trillion by 2024, but resulted in a $ 1.2 trillion trade deficit. To manage this deficit, the United States instead imposes duty rates in order to encourage local manufacture rather than to ban trading directly.
Pakistan’s trade in the United States is valued at $ 5.5 billion and ranks 33. Among US exporters. The United States has imposed a 29% duty on Pakistani exports. Of the total $ 5.5 billion in exports, the clothes account for $ 3.2 billion, while home textiles are $ 1.5 billion.
Bangladesh is competing with Pakistan in the clothing sector, while China is a key competitor in home textiles. Both China and Bangladesh have been exposed to higher duties – China of 54% and Bangladesh 37% – creates the opportunities for Pakistan.
In clothing, Pakistan enjoys an advantage of 8% and in home textiles, a 25% benefit due to these higher tariffs on its competitors. India faces a 26% duty compared to Pakistan’s 29%, giving it only a 3% advantage.
“This is not a significant benefit to India, and Pakistan can compensate by diversifying his trade with other partners,” an official told Express Pakinomist. “The total impact of US tariffs on Pakistan is estimated at $ 600 to $ 700 million, which could be offset through trade.”
Officials said Pakistan had the opportunities that arose from US-China Tariffs War in various sectors, while there were still sectors that had the US duties. E.g. Exported Pakistan $ 130 million worth of plastic polyethylenrephthalat (PET), and US exemptions were still intact.
Pakistan, added officials, could increase maize exports. The United States is a major corn manufacturer while China was a key buyer. Due to the tariff, Pakistan had a chance to catch a share of the Chinese market. Pakistan’s maize exports rose from $ 12 million by 2020 and rose to $ 347 million by 2023.
Similarly, Pakistan can also benefit from the possibility of meat exports to China, which has traditionally fetched meat from the United States. Five years ago, Pakistan signed an appointment morandum (Mou) with China, and its meat exports have now reached $ 375 million.
“The net effect of these opportunities, despite some challenges due to US customs policies, could be about $ 250 million,” the official is estimated. “Pakistan has the opportunity to extend exports in meat, maize and sporting products. Provinces should offer incentives to livestock and agricultural sectors to increase exports.”
Demand for sports equipment is also high in China as well as the United States presenting another market to Pakistan. “However, Pakistan needs an aggressive marketing to take advantage of these opportunities,” said an official of the Ministry of Commerce.
He noted that Pakistan was facing a $ 1 billion trade deficit in the last eight months. However, higher transfers were expected to offset the impact of projections of $ 35 billion in transfers this year. “There will be no dollar crisis in the country,” he assured.
Pakistan is also looking at the African market and Gulf Cooperation Council (GCC) countries to divert his trade. Pakistan and the GCC countries are at an advanced stage to sign a free trade agreement (FTA), according to the officials.
Countries like Japan are very dependent on exports, so any decrease in trading in the United States would affect their GDP. However, Pakistan’s GDP is not export -dependent, where exports only contribute 8%. Therefore, changes in US trade policies will not significantly affect Pakistan’s GDP.
American trade
The US import amounts to $ 3.36 trillion in 2024. The proportion of Mexico made up 15% followed by China, Canada, Germany and Japan in a range 5-14%. Out of the total trade, the proportion of Pakistan is 0.16% by 2024.
However, the proportion of its competitors was higher as Vietnam’s share was 4.2%, Bangladesh 0.26%, Sri Lanka 0.09%and India 2.7%. Experts say Pakistan has been dependent on textile exports to the United States, but now the higher tasks for competitors would enable Pakistan to diversify his exports to us.
“Pakistan has an opportunity to increase the export of textile to the United States due to higher duties imposed on its competitors such as Bangladesh, Vietnam and China,” said Secretary General Shahid Sattar Sattar. He added that Pakistan would still face competition from Indian textiles in the US market.
“We believe theoretically because of Pakistan’s disadvantage with India that Pakistan texture can face some pressure, but higher duties on Bangladesh and Vietnam should provide some respite to Pakistan exports in the US,” the topline research said in a report.
