US tariffs hit Pakistan’s exports, raising competitiveness concerns
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KARACHI: Experts have warned that the United States has imposed a 29 % tariff on Pakistani imports, which can challenge the country’s export competition.
Prices have a shock to globalization and liberalization, which is an agenda that has supported the art for decades, said Finance Minister Dr. Khazan Najib, in his comments about the news, Finance Minister Dr. Khazan Najib said that the United States has created a mutual interest in the United States.
The markets were developed for 20 % baseline tariffs, so 10 % baseline has been welcomed. Najib explained that some of the largest trade partners in the United States was more than expected because of some of the largest trading partners.
In the 100 countries with which the United States maintains a trade deficit, Pakistan stands in the 33rd position with a $ 33 billion trade deficit.
Mustafa Fahim, an investment in the Middle East, explained that the United States is calculating bilateral prices by looking at two important factors: a country explains the import duties on US goods and overall trade balance. If a country receives more taxes on US products or runs a major trade surplus with the United States, Washington is likely to impose equal taxes. He added that the purpose is to make trade more “fair”, ensuring that the two sides impose similar expenses on each other’s goods.
Tariff model
In a statement published on Wednesday night, the US trade representative explained the method of calculating the revenue. Calculation consider the following data: Total exports to a country; Total imports from the country; APSELIN (Imports of imports in relation to import prices); And PHI (by passing through revenue to import prices).
Epilein measures how much the amount of imports is responsible for changing import prices. The US trading representative puts Epplin at 4. The price of 4 means that for the price of imports every 1.0 % increase, the amount of imports decreases 4.0 %. Similarly, if import prices decrease by 1.0 %, the amount of imports has increased by 4.0 %.
The PHI has measured how much tariffs are reflected in the final price of imported goods. According to the statement, the price of PHI was fixed at 0.25. This means that only 25 % of the price hikes are approved to import prices, while the remaining 75 % of exporters are absorbed through export or supply chain adjustment.
According to the US trading representative, in 2024, the total trade of US goods with Pakistan was $ 7.3 billion. US exports to Pakistan reached 1 2.1 billion (from 2023 to 4.4 percent), while US imports from Pakistan were $ 5.1 billion.
(From 2023 to 4.9 percent) The United States had a $ 3 billion trade deficit with Pakistan, which increased by 5.2 percent over 2023.
To calculate prices, the United States uses the following formula: trade deficit (difference between imports and exports) is divided by flexibility, passage and import production. In the case of Pakistan, the United States uses the following data: Exports: 1 2.1 Billion; Imports: 1 5.1 Billion; The flexibility of imports: 4; And by pass: 0.25.
According to the calculation, Pakistan’s revenue was 59 %. Then the number was divided by two, which created a 29 % discounted rate.
Key exports such as textile, leather equipment and surgical equipment are important partners in trade with the United States. If costs increase, Fahim warns, Pakistani products can lose competitiveness, reduce exports and affect the US market -dependent industries.
‘Astonishing development’
The head of the Sustainable Development Policy Institute (SDPI) Dr Abid Qayyim Siliar said that Trump demanded the implementation of tariff ‘Liberation Day’ for the United States. “Then one can predict a global retaliation day, where major economies like the European Union, China and Japan will subjugate US exports to revenge. There is no winner in this tariff war. This is a lost situation where American consumers will suffer the most.”
Former CEO of the Trade Development Authority of Pakistan (TDAP), Zuber Motiwala, calls the tariffs a “astonishing development” especially for textiles. He told the news, “29 percent of the tariffs on Pakistan, compared to 26 percent of India, puts our exporters at a loss.” He added that Pakistan’s high manufacturing costs already make it difficult to compete internationally, and increasing revenue can put exports into a dangerous zone.
However, Pakistan Textile Exports Association (PTEA) patron Intention Khurram Mukhtar said, however, he said that Pakistan would maintain competitive superiority due to its integrated supply chain, quality quality and strong trade relations. But, he noted that the global economic impact of these rates has not yet been fully revealed, especially in relation to the services provided by US companies around the world.
Mukhtar also pointed out that Pakistan has been a major US cotton importer for decades, which benefited US farmers and strengthened bilateral trade relations. “We urge the US administration to recognize this long -standing relationship and ensure fair trade policies that do not impact Pakistan’s exports inadvertently,” he said.
In addition, he argued that the US tariff models-which evaluate import flexibility and prices-US Pakistan is not compatible with commercial dynamics. To cope with tariff challenges, he said that Pakistan would be engaged in seeking relief with US trade officials and seeking priority access, to diversify markets, increase value editions and advocate government policies to protect its export sector.
What is the next
As long as we run a trade surplus with the United States, “they will impose taxes on our luggage”, former Finance Minister Muftia Ismail told the news.
According to Salri, prices will face the country’s export performance in a short run. However, he added, there is an opportunity in the middle period.
Although only 0.16 % of Pakistan’s total US imports, the US market is very important for local industries. Textiles dominate exports to the United States (75-80 %), followed by leather, surgical equipment, rice, cement, steel products and salt.
The textile sector has more taxes in Pakistan’s major rivals such as Bangladesh, Sri Lanka, Vietnam and Cambodia. Salri added that if Pakistan can compete with them on quality, “it has the opportunity to fill the gap”.
Does Pakistan have the opportunity to negotiate? Ismail said, “We will see how it runs,” he said, while Pakistan cannot talk, it can take some steps that the US government wants. According to Ismail, these are not just economic privileges that Pakistan can take. It may be considered as a “sending” [the US] Some prisoners “to avoid high prices.
Dr. Khakin thought that “negotiation scope” was about to happen. In Pakistan’s case, with about $ 7 billion in trade volume, officials should counter the negotiating strategy and also analyze that if more taxes on China and Bangladesh give Pakistan one edge. Finally, it is about local businesses that improve production capacity, costs, new markets, and product diversity, which all work real hard.
“I have always maintained that the energy sector must be corrected by Pakistani authorities to reduce the cost of business, and now it has become even more important,” said Dr Khakin, and now it has become even more important.
When asked that Pakistan should consider reducing the revenue imposed on US goods, Ismail said, “It would be a good gesture but would not be very useful and could make Europe and China anger.”
