The second round U.S. reciprocal tariffs on 57 countries began Wednesday with Pakistan’s exports to world’s most lucrative market subjected to 29 % tariff amid concerns about their staying competitive.
Major European partners are among the countries to pay tariff on their exports. China will have to pay a combined 104% levy while Indian exports will be charged 26% tariff.
The sweeping tariffs, part of the worldwide charges announced by President Donald Trump, may hit Pakistani exports harder than those in neighboring India, as they would expose vulnerability of its vital textile sector.
Pakistan exported $3.6 billion worth of goods to the U.S. in first seven months of fiscal year 2024-25. The volume accounted for 19% of Pakistan’s total exports. Textiles and apparel formed a big 79 % fetching the cash-starved country $2.8 billion.
Trump’s decision to impose a 29 per cent tariff on Pakistani exports has sparked alarm across the country’s economic and political corridors.
However, responding to the tariffs issue at a press conference in Islamabad Pakistan Finance Minister Muhammad Aurangzeb said that the country was looking at them as an opportunity to negotiate “balanced economic relationships”.
“You should never let a good crisis go to waste,” Aurangzeb said.
“This isn’t just about the tariffs. It’s about using the moment to negotiate smarter and build more balanced economic relationships.”
Notably, 94 % of the Pakistani textile exports are value-added items such as garments and home textiles. Despite this, Pakistan already faces tariffs of up to 17 per cent on these products, while its cotton imports from the United States continue to enter duty-free.
If President Trump’s proposed tariffs are enforced, Pakistan’s $6 billion export market to the U.S. could face a severe problems— likely putting downward pressure on the rupee and driving up import costs.
In a swift response, Pakistan’s Prime Minister Shehbaz Sharif has set up two key bodies to coordinate Pakistan’s strategy. The first, a steering committee led by Finance Minister Muhammad Aurangzeb, brings together policymakers, economists and industry voices. A second working group chaired by the Secretary of Commerce has been tasked with producing actionable recommendations to mitigate the fallout.
Meanwhile, Pakistan’s Foreign Minister Ishaq Dar had a phone call with U.S. Secretary of State Marco Rubio on Monday, discussing bilateral ties and economic cooperation.
“During the call, Dar reiterated Pakistan’s commitment to strengthening its partnership with the United States,” Pakistan’s foreign ministry said in a statement.
U.S. Secretary of State Marco Rubio, Image: Gage Skidmore/ Wikimedia Commons
Dar emphasized increased cooperation in areas such as trade, investment, and counterterrorism.
Rubio, in turn, expressed the Washington’s desire to expand economic engagement, particularly in sectors like critical minerals.
“He said that cooperation in economy and trade would be the hallmark of future relations between the two countries,” the Foreign Ministry noted.
This contact between U.S ,and Pakistani top diplomats – their first since the Trump Administration’s inception, has created a sense of optimism regarding the tariff issue.
However, the economists believe that Pakistan has not been singled out and the tariffs are part of the worldwide measure President Trump has taken to fix the global economic wrongs that according to him harmed the U.S. interests over the past several decades.
Barring India, the U.S. tariff on imports from regional countries like Bangladesh, Sri Lanka and Vietnam is higher than the one imposed on Pakistan, making its products still competitive vis-à-vis other Asian countries.
“No doubt, we should be concerned about the imposition of tariff, yet there are still opportunities to keep Pakistani products afloat in the U.S. market,” Dr. Qais Aslam, an economist said.
In Washington, State Department Spokesperson Tammy Bruce said Secretary Rubio and Minister Dar “discussed U.S. reciprocal tariffs on Pakistan and how to make progress toward a fair and balanced trade relationship.”
“Secretary Rubio thanked Pakistan for the arrest and transfer to the United States of ISIS-K operative Mohammad Sharifullah, and the Secretary and Deputy Prime Minister Dar underscored the importance of continued cooperation on counterterrorism,” the spokesperson said.
A statement said, “Secretary Rubio also emphasized the importance of Pakistan’s cooperation on law enforcement and addressing illegal immigration…. The Secretary raised prospects for engagement on critical minerals and expressed interest in expanding commercial opportunities for U.S. companies.
The two countries look forward to working together to address global challenges during Pakistan’s two-year tenure as a non-permanent member of the United Nations Security Council that began on January 1.
The State Department, earlier announced that Senior Bureau Official (SBO) for the Bureau of South and Central Asian Affairs, Eric Meyer, will lead an interagency U.S. delegation traveling to Islamabad from April 8-10 to “advance U.S. interests in the critical minerals sector” at the Pakistan Minerals Investment Forum.
He will meet with senior Pakistani officials to expand opportunities for American businesses in Pakistan and promote the deepening of economic ties between our two countries, the department said.
