Pakistan has opted for a diplomatic approach in response to the United States’ recent imposition of a 29% additional tariff on its exports. Unlike other nations that are escalating the trade war with countermeasures, Islamabad has decided to seek a review of Washington’s decision. A high-level meeting, chaired by Finance Minister Muhammad Aurangzeb, concluded that Pakistan’s embassy in Washington would immediately request a meeting with the US trade representative to explain its position.
Despite being included in the US tariff list, Pakistani officials argue that Washington was already charging higher trade-weighted average tariffs on Pakistani goods than Islamabad does on US imports. Pakistan’s exports to the US saw a 15% increase this fiscal year, reaching $3.9 billion, resulting in a $3 billion trade surplus. However, with new tariffs raising duties on Pakistani garments to as high as 49%, key sectors such as textiles and leather exports face significant challenges.
The Pakistani government remains hopeful that a case can be made for a review of these tariffs, especially as similar duties on China, Vietnam, Cambodia, and Sri Lanka create new opportunities for Pakistan’s textile industry. However, stiff competition from Vietnam, Egypt, India, and Turkey remains a concern. Meanwhile, Trump’s tariff decision has triggered a global market meltdown, pushing oil prices down by 7% and sparking fears of inflation and recession. With major economies like China and the European Union considering retaliatory measures, the world braces for an intensified trade war.
