US collected $611mn in tariffs on goods exported by Pakistan: report
The United States collected approximately $611 million in annual tariffs on goods exported by Pakistan, while Pakistan collected about $157 million in duties on US products in 2024, an analysis of trade and tariff data reveals, says Economic Policy Business Development (EPBD) Think Tank.
EPBD further stated that Pakistan's exports to the US were valued at $5.71 billion in 2024, with the US applying a weighted average tariff of 10.7% on these goods. Only 14.8% of Pakistani exports to the United States enter duty-free, while approximately 52.9% face some form of tariff.
In contrast, Pakistan imposes a simple average MFN duty of 10.3% on imports (13.0% for agricultural products and 9.9% for non-agricultural goods), with a trade-weighted average of 7.6%. Textiles dominate Pakistan's exports to the US, accounting for 77% of total export volume, making this sector particularly vulnerable to any changes in US tariff policies.
US tariffs put growth at risk
The data indicates a significant tariff burden on Pakistani exports to the US market compared to other major trading partners like the European Union, where Pakistan benefits from preferential trade arrangements.
The impending increase in US tariffs to 29% under the reciprocal tariff policy presents both challenges and opportunities for Pakistan.
A research of the Think Tank further noted that while the overall tariff burden will increase significantly, Pakistan's position relative to competitors like China (facing 245% tariffs), Vietnam (facing 46% tariffs) and Bangladesh (facing 37% tariffs) may create strategic advantages in certain sectors.
Pakistan's upcoming challenges include addressing the US's recent announcement of a reciprocal tariff policy that could raise duties on Pakistani goods to 29% in 2025, potentially affecting its trade surplus which stood at $3.65 billion in 2024, the Think Tank added. The impending increase in US tariffs to 29% under the reciprocal tariff policy presents both challenges and opportunities for Pakistan.
Trump tariffs: Pakistan to send high-level delegation to US
While the overall tariff burden will increase significantly, Pakistan's position relative to competitors like China (facing 245% tariffs), Vietnam (facing 46% tariffs) and Bangladesh (facing 37% tariffs) may create strategic advantages in certain sectors.
Pakistan could leverage its competitive advantage in wearing apparel, woven fabrics, and food products where tariff increases are lower compared to regional competitors. In sectors like sports goods, Pakistan is projected to see improved market access relative to competitors, with 17 percentage points advantage over Vietnam, 8 percentage points over Bangladesh, and 216 percentage points over China.
However, India's slightly better positioning with a 26% reciprocal tariff rate poses a competitive threat, particularly in textile, where Pakistan faces a 17.73 percentage point increase compared to India's 7.962.
To navigate this shifting trade landscape, Pakistan should consider diversifying its export markets beyond the US, enhancing competitiveness in sectors with favorable tariff differentials, and engaging in diplomatic efforts to negotiate better terms. The heavy concentration of exports in textiles (77%) makes diversification particularly urgent as a risk mitigation strategy, it added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
28 minutes ago
- Business Recorder
Iron ore consolidates, market awaits clarity on Sino-US trade talk progress
BEIJING: Iron ore futures prices were range-bound on Thursday, as investors awaited more details on the trade talks between the U.S. and China, even as U.S. President Donald Trump struck a positive note. The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) closed the morning trade 0.07% lower at 705 yuan ($98.16) a metric ton. The benchmark July iron ore on the Singapore Exchange dipped 0.53% to $94.6 a ton, as of 0400 GMT. Trump on Wednesday said he was very happy with a trade deal that restored a fragile truce in the U.S.-China trade war. But Beijing has not confirmed the progress on the trade talks. 'If both countries could finalise a deal, it's definitely good news as it will remove some uncertainty for the export business; but at the same time, it may reduce the possibility of more stimulus (by Beijing),' said a steel mill manager on condition of anonymity. Focus has temporarily shifted to the weakening fundamentals before there is more clarity on Sino-U.S. trade talks, said Ge Xin, deputy director at consultancy Lange Steel. Iron ore rebounds as traders cheer Sino-US trade progress 'Steel output has been declining for two weeks, indicating lower consumption of raw materials, including iron ore,' Ge said Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 1.9% and 1.33%, respectively. Most steel benchmarks on the Shanghai Futures Exchange shed. Rebar lost 0.8%, hot-rolled coil fell 0.74%, wire rod dropped 0.72% while stainless steel added 0.76%.
Business Recorder
43 minutes ago
- Business Recorder
Indian rupee likely to be buoyed by Fed cut bets, softer US trade signals
MUMBAI: The Indian rupee is expected to open marginally higher on Thursday, supported by a weaker dollar following further signs that U.S. President Donald Trump is taking a conciliatory approach on tariffs and on rising expectations of Federal Reserve rate cuts later this year. The 1-month non-deliverable forward indicated an open in the 85.42-85.44 range, versus 85.51 in the previous session. The dollar index fell 0.5% on Wednesday and extended losses in the Asia session on Thursday. The decline lifted regional currencies, with most Asian units rising between 0.1% and 0.4%. The dip in USD/INR at the open may 'at best' extend to the 85.30–85.35 zone, a currency trader at a state-run bank said. A move below that zone would mark a significant victory for rupee bulls, he added. The trader's remarks come against the backdrop of relatively range-bound trading in the Indian currency over recent sessions. Indian rupee set for calm open amid yuan watch, two-sided flows Trade and fed weigh on the dollar Expectations of cooing trade tensions and potential Fed rate cuts kept the dollar under pressure. Trump said on Wednesday he would be willing to extend a July 8 deadline for completing trade talks with countries before higher U.S. tariffs are imposed. Further, Trump said that a deal to get the fragile truce in the U.S.-China trade war back on track is done. Meanwhile, data on Wednesday showed U.S. consumer prices rose less than expected in May, leading traders to ramp up bets of a rate cut at the Fed's September policy meeting. The inflation report 'eased some fears around persistent inflation acceleration' and accordingly, additional Fed easing was priced in with about 5-6 basis points of incremental easing added to end-2025 and 2026, Morgan Stanley said in its daily commentary.
Business Recorder
an hour ago
- Business Recorder
Australian shares flat as mining losses counter banks, energy boost
Australian shares were largely unchanged on Thursday, as miners partially offset strong performances in banks and energy stocks, while U.S. President Donald Trump's hint at extending the trade negotiation deadline eased concerns over imminent tariff hikes. The S&P/ASX 200 index held its ground at 8,593 points, as of 0108 GMT. The benchmark on Wednesday touched a record-closing high of 8,592.1 points. Overnight, Trump signalled openness to extending the July 8 deadline for trade talks before higher U.S. tariffs take effect, though he expressed doubt that an extension would be necessary. China and the United States, Australia's top export partners, reached a framework deal, boosting investor optimism for a lasting resolution between the two superpowers and easing fears of further market disruption. However, the lack of specific terms leaves the possibility of future tariff disputes. Chinese export-reliant miners slipped 0.4%, set for their weakest session since June 2, if current momentum holds. Australian shares hit record peak as US-China revive trade truce Mining heavyweights BHP, Rio Tinto and Fortescue dropped between 0.9% and 2.4%. Bucking the sombre trend, energy firms climbed 1.4% after oil prices hit a two-month high. The sub-index is on track for its fourth consecutive session of gains. Index majors Woodside and Santos advanced 1.5% and 0.8%, respectively. Financials rose 0.2%, with the 'Big Four' banks climbing between 0.1% and 0.4%. Gold stocks tracked bullion prices higher, climbing nearly 2%. Shares of metals miner Northern Star Resources gained about 1%. Among corporate news, Qantas emerged as one of the top performers in the benchmark index, up 4.3%, a day after the carrier announced the closure of Singapore-based budget airline Jetstar Asia due to rising costs and competition. In other news, the Australian defence minister expressed confidence in the AUKUS submarine pact, despite the Trump administration launching a formal review of the agreement. New Zealand's benchmark S&P/NZX 50 index edged 0.1% lower to 12,592.86 points.
