US collected $611m in tariffs on Pakistani Goods in ‘2024

Pakistan Faces Mounting Tariff Pressures from U.S., But Competitive Edge Remains

Many other nations are taking advantage of Pakistan and exerting pressure, to which EPBD finds that in 2024, the United States collected in tariffs alone on Pakistani exports close to $611 million while Pakistan in the same year collected less than $157 million in tariffs from American goods.

However, the report shows that tariff treatment is highly imbalanced—one that pleased Pakistan since it has strong trade volumes, its exports to U.S. amounted to $5.71 billion. Entering duty free, only 14.8 percent of Pakistani exports faced a 10.7 percent weighted average tariff from the U.S. More than 52.9 percent of all Pakistani shipments had tariffs on them putting the country at relative disadvantage.

On the contrary, the trade weighted average duty applicable to imports into Pakistan on a value weight scale is 7.6 percent, and simple MFN average duty is 10.3 percent, which together signify the asymmetry in the pattern of bilateral trade.

Textiles at the Center—And Under Threat

A massive 77% of Pakistan’s exports to the U.S. are textiles, however, this overwhelming dependence may become an issue at some point. Reciprocal tariff policy was made ready by U.S. to raise its import tax duty on Pakistani goods up to 29% by 2025, an action that will take a heavy toll on textile exporters.

Instead,” warns the EPBD report, “the textile sector is Pakistan’s strength, over-concentration in this area makes us vulnerable to negative shocks to external national economy.”

Strategic Openings Amid Global Realignment

However, Pakistan still seems to be in a stronger relative position vis a vis regional competition like:

China – who has slapped retaliatory tariffs on US goods up to 245 per cent.

Vietnam (46%),

Bangladesh (37%).

Under the new structure, Pakistan could use its advantage over Vietnam by 17 points, over Bangladesh by 8 points and even by an incredible 216 points over China in sports goods.

But India is a very close competitor with a slightly read lower projected reciprocal tariff of 26%, especially in textiles where Pakistan could be more under the pressure of competition.

Recommendations for Pakistan’s Trade Future

In this context, the EPBD call for policy recalibration in order to cushion the uncertainty created by changing U.S. trade policies. Key recommendations include:

Development of exports of products beyond the textiles for reducing the dependency on a single sector.

Searching out new markets to lessen an overdependence on the U.S.

Since most of the tariffs for the sectors in which India is investing i.e. sports goods, food products, woven fabrics, are relatively lower.

And strengthening trade diplomacy, securing favourable terms, long term concessions in high potential markets.

Looking Ahead

In the world where tariff regimes are becoming tighter and global trade dynamics are changing, Pakistan is all geared up to ensure that its hard gained export bouquet remains intact. Despite the upcoming U.S. tariff policy, there is also the opportunity to realign Pakistan as a dependable supplier in sectors where others will find themselves priced off.

If Pakistan adopts smart strategy and immediate reforms, external pressures can be turned into economic opportunities, but the window of opportunity is now only.