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An outside view of the Pakistan Institute of Development Economics (PIDE) building. — APP/File
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ISLAMABAD: Pakistan’s famous think tank-Pakistan Institute of Development Economics (PIDE), affiliated with the Planning Commission, has warned that exports to Pakistan may reduce exports at a range of 20-25 %, with a annual loss of $ 1.1 billion to $ 1.4 billion annually.
The storm may be found on Pakistan’s commercial horizon, as Payde has warned that the United States has proposed bilateral prices, which could have a devastating impact on the country’s export sector.
In a Stark Policy Note released on April 13, 2025, the Institute warns that it may reduce economic volatility, significant job losses, and a significant reduction in foreign exchange revenue.
In this study, Dr. Muhammad Zeeshan, Dr. Shujaat Farooq, and Dr. Usman Qadir – have analyzed the results of 29 % mutual rates proposed on Pakistani exports to the United States. When the current 8.6 % of the most preferred nation (MFN) is included in the tariff, total duty can reach 37.6 %.
This will likely result in a 20-25 % reduction in exports to the United States, which will be translated at an annual loss of $ 1.1-1.4 billion, with the shock in the textile sector.
“Trade is not a game of zero. It is about a common price-about the communication of the building that strengthens both economies. These proposed revenues are at risk of eliminating these relations,” said Dr. Nadeem Javaid, in a strong statement with a new Pad Vice Chancellor’s new policy note. “In Payde, we see this moment not only as a threat, but also as a catalyst – more flexible, diverse, and strategic export for Pakistan to the future.”
In fiscal year 2024, Pakistan exported $ 5.3 billion worth of goods to the United States, making it the export market of the country’s largest country. An important part of these exports was textile and apparel, which already faces up to 17 % prices.
If the proposed rates are implemented, Pakistan’s prices will be severely eliminated, which will potentially allow regional rivals like India and Bangladesh to occupy the market share. Economic results will move beyond textile.
Large exporters such as addiction mill and interlop can be forced to reduce production, which pose a risk to more than 500,000 jobs. Non-textile exports-including leather, rice, surgical appliances and sports equipment-also have to increase. Despite the dangers, the Paide sees the crisis as a strategic change. The policy note encourages Pakistan to respond faster and thoughtfully.
In the short term, Pad has suggested that Pakistan engage in high -level diplomatic efforts to highlight the mutual cost of taxes and maintain trade relations for a long time. For example, the United States exported 1 181 million cotton to Pakistan in 2024, which is now a threat.
To create a dialogue room, Pakistan can also consider reducing the revenue on you selected US imports – such as machinery, scrap metal and petroleum. In addition, Pakistani firms can be encouraged to use more US -born inputs like cotton and yarn to help maintain value chain and help to achieve tariff waivers.
For a long -term, Pad emphasizes the need to diversify both export products and markets. Emerging destinations offer the potential to develop in areas such as the European Union, China, ASEAN countries, Africa, and the Middle East, halal food, processed foods and sports equipment.
The report also calls for steps to reduce energy and supply costs, smooth regulations and promote innovation and adoption of technology. In addition, a comprehensive US trade strategy is essential. A person who focuses on harmonizing technology, agriculture, energy and value -added manufacturing.
On the international front, Paide noted that the proposed US revenue exceeds 3.4 % from the WTO -bound tariff ceiling, which is likely to violate multilateral trade rules. Although legal facilities through the WTO are an option, Pakistan’s limited financial resources can hinder such efforts.
More importantly, prices have been ignored by the integrated nature of global trade.
The American Pakistan Textile Loop is an excellent example. The US cotton supplys Pakistani mills, resulting in exports to the United States. Disruptions in this value chain benefit any country.
The road ahead is challenging, but it also offers an opportunity for Pakistan to recover and reinforce its export framework.
With timely diplomacy, strategic policy reforms, and bold diversity efforts, Pakistan cannot only cope with this external shock but also emerges as a more competitive and flexible player in the global economy.
