Retaliatory tariffs unviable for Pakistan: PBC

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KARACHI: Pakistan Business Council (PBC) said on Friday that retaliation in response to US prices is not possible for Pakistan. Instead, the nation should focus on accelerating its efforts to maintain duty -free access to the European Union under the GSP Plus program.

On Wednesday, US President Donald Trump announced mutual rates on several countries, including 29 percent in Pakistan. The United States is the export destination of Pakistan’s largest country and one from which it receives the largest trading surplus. In 2024, the United States imported $ 5.46 billion worth of goods from Pakistan. It represented 17 % of the country’s total exports. That same year, Pakistan recorded a trade surplus with 33 3.33 billion US. From January to February 2025, Pakistan exported $ 1 billion, without which, without the effects of high taxes, the US expected exports would be $ 6 billion.

Pakistan’s key rivals for textile products are high.

The PBC said in a note on Friday, “There is no option for the Counter Tariff Pakistan. Nor is the Geo Political Bilateral.” He added, “Demand is inevitable due to excessive revenue, and Pakistan will need to give a staggering impact on exports.”

According to the PBC, in the short term, it would not be possible to change Pakistan’s export mix to take advantage of mutual prices with China, Vietnam, Bangladesh and Indonesia. At the rates of the parity MFN, these countries were exporting large quantities, often at the price of a high unit, which means that there is a difference of a quality product that will take time to resolve Pakistan. Also, despite duty -free access to the European Union’s GSP+ program, Pakistan’s exports, including its textile, yellow against China and India, pay full duty.

“Textile exporters should examine how they can remove the quality difference,” he said. “The United States is in danger of high taxes with exports, Pakistan will have to double its efforts to maintain its duty -free access to the European Union under the GSP+ program,” he said. Pakistan’s exports to the European Union are much higher than the United States. “

“The government should remove the gap found in compliance with human rights, wage rights, environmental protection, and good governance, and should show compliance through surveillance and reporting. Exporters should not defoles on ESG or DEI, even if consumers in the United States are so inclined under the current government.” The PBC noted that it is likely to have a positive impact on Pakistan’s exports as US textile consumers reduce cheap goods from Pakistan. The government has to ensure that its policies, especially on energy and taxation, support exports. The ongoing review of the Export Facility Scheme should not interfere with exporters’ ability to import input duty and sales tax -free, while input is possible for the local industry to supply GST -free exporters, as was the case with the last budget.

“The purpose of the United States is to balance its trade relations,” he said. Cotton, its original export to Pakistan, already attracts zero duty, while soy beans are currently imposed at 3.0 % duty. Mechanical and aeronautical machinery are also imposed on 3.0 % duty. “

“However, some of these imports apply additional customs duty (ACD) and regulatory duty (RD), which increase duty -paying costs with GST. The government has to review ACD and RD to address US concerns.”