The United States has imposed reciprocal prices on different countries, including Pakistan to manage the trade deficit and relaunch its manufacturing sector, considered by some as a threat to their exports, while some see as an opportunity to strengthen their exports.
Pakistan is one of these countries which do not consider the tariff war unleashed by US President Donald Trump, as a threat rather seizes it as an opportunity to improve its exports of textile products to the largest world market.
The key export of Pakistan is home clothes and textiles – around 70 to 80% of the country’s total exports to the United States. Banlgadesh and China are the main competitors of Pakistan in this area, and these two countries have also faced higher prices that would open opportunities for Pakistan, according to experts.
Trump announced the taxation of 29% of rights on Pakistani products, as well as 26% on imports from India, 37% in Bangladesh, 44% on Sri Lanka and 46% in Vietnam. In addition, a tariff war tug between the United States and China could also open ways for Pakistani products such as corn, meat and sports products.
In 2020, US imports amounted to 2.4 dollars’ billions, going to $ 3.3 billions in 2024, but resulting in a trade deficit of $ 1.2 billion. To manage this deficit, the United States rather imposes prices in order to encourage local manufacturing rather than prohibiting trade.
Pakistan trade with the United States is estimated at $ 5.5 billion, ranking 33rd among American exporters. The United States has imposed a price of 29% on Pakistani exports. Of the total of $ 5.5 billion in exports, clothing represents $ 3.2 billion, while domestic textiles amounted to $ 1.5 billion.
Bangladesh rivals Pakistan in the clothing sector, while China is a key competitor in the textiles of the house. China and Bangladesh had to face higher tasks – China at 54% and Bangladesh 37% – possibilities creating opportunities for Pakistan.
In clothing, Pakistan has an advantage of 8% and in home textiles, an advantage of 25% due to these higher rates on its competitors. India faces a tariff of 26% compared to 29% of Pakistan, giving it only 3% advantage.
“This is not a significant advantage for India, and Pakistan can compensate by diversifying its business with other partners,” an official told L’Express PK Press Club. “The total impact of American prices on Pakistan is estimated from $ 600 to $ 700 million, which could be offset by the diversion of trade.”
The officials said that Pakistan had the opportunities that were the war of the American-Chinese tariffs in various sectors, while the sectors still had the American tariff exemptions. For example, Pakistan exported $ 130 million in Plastic Polyethylene (PET) and American service exemptions were still intact.
Pakistan added officials, could increase corn exports. The United States is a large corn producer, while China was a key buyer. Due to the price, Pakistan had the chance to seize a share of the Chinese market. Pakistan corn exports increased from $ 12 million in 2020, going to $ 347 million in 2023.
Likewise, Pakistan can also capitalize on the opportunity to export meat to China, which traditionally comes from the United States. Five years ago, Pakistan signed a memorandum of understanding with China, and its meat exports have now reached $ 375 million.
“The net impact of these opportunities, despite certain challenges due to American tariff policies, could be around $ 250 million,” said the official. “Pakistan has the possibility of extending exports to meat, corn and sports products. The provinces should offer incentives to the cattle and agro sectors to stimulate exports.”
The demand for sports equipment is also high in China as well as in the United States, presenting another market for Pakistan. “However, Pakistan needs aggressive marketing to take advantage of these opportunities,” said an official of the Ministry of Commerce.
He noted that Pakistan has faced a billion dollars trade deficit in the past eight months. However, higher funds should compensate for the impact, with projections of $ 35 billion in fund transfers this year. “There will be no dollar crisis in the country,” he said.
Pakistan also turns to the African market and the countries of the Gulf Cooperation Council (GCC) to divert its business. Pakistan and CCG countries are at an advanced stage to sign a free trade agreement (ALE), according to officials.
Countries like Japan are strongly relying on exports, so any drop in trade with the United States would have an impact on its GDP. However, Pakistan GDP does not depend on export, exports contributing only 8%. Consequently, changes in American trade policies will not have a significant impact on Pakistan’s GDP.
US trade
American imports amounted to 3.36 billions of dollars in 2024. The share of Mexico was 15%, followed by China, Canada, Germany and Japan from 5 to 14%. In total, the share of Pakistan was 0.16% in 2024.
However, the share of its competitors was higher because the share of Vietnam was 4.2%, Bangladesh 0.26%, Sri Lanka 0.09%and India 2.7%. Experts say that Pakistan depends on textile exports to the United States, but now the upper tasks on competitors would allow Pakistan to diversify its exports to us.
“Pakistan has the possibility of increasing textile exports to the United States due to the higher rate imposed on its competitors such as Bangladesh, Vietnam and China,” said the secretary general of the Association of Textiles, Shahid Sattar. He added that Pakistan would still be confronted with competition from Indian textiles on the American market.
“We think, theoretically, due to the disadvantage of Pakistan’s duty with India, Pakistan textile exports can face a certain pressure, however, higher tasks on Bangladesh and Vietnam must provide respite to Pakistani exports in the United States,” said topline research in a report.
