Islamabad, June 9, 2025 – As the U.S.-driven global trade war intensifies, Pakistan finds itself at a pivotal moment—shielded from immediate fallout yet uniquely poised to benefit from the evolving dynamics.
According to the Economic Survey of Pakistan released on Monday, shifting global supply chains and recalibrated trade routes offer Pakistan a rare chance to reposition itself in global markets. By employing smart diplomacy, sector-specific investments, and timely policy responses, Pakistan could transform potential risks into tangible economic gains.
The country has initiated discussions with U.S. authorities to address additional tariffs imposed on Pakistan’s exports. Both public and private stakeholders remain optimistic that diplomatic engagement will resolve the issue through mutual understanding. Despite global trade disruptions, Pakistan has a window of opportunity to enhance its export competitiveness.
Currently ranked 33rd in terms of trade surplus with the U.S., Pakistan sends only 17% of its exports to the American market. In 2024, U.S. exports to Pakistan stood at $2.14 billion, while Pakistan’s exports to the U.S. reached $5.47 billion. As a key trade partner of the EU, China, and the Middle East, Pakistan may continue stable trade flows even as major economies face headwinds.
Pakistan maintains relatively low reciprocal tariffs, offering a more open market to U.S. goods. The trade-weighted average tariff on U.S. imports is 7.3%, while the U.S. imposes a 9.9% tariff on Pakistan’s exports. Yet, recent actions led to 30% additional tariffs on Pakistan, lower than those on Cambodia (49%), Vietnam (46%), and China (145%). This strengthens Pakistan’s case for improved market access.
Cotton remains the backbone of U.S.-Pakistan textile trade, with Pakistan importing over $700 million in U.S. raw cotton in FY 2024. The government aims to boost this cooperation further. Additionally, recent resolution of issues around soybean and beef imports from the U.S. will enhance bilateral trade.
Finally, declining oil prices—Brent at $64/barrel—offer macroeconomic relief. With 28% of imports energy-related, falling prices ease inflation and improve export sector competitiveness, particularly textiles. The Ministry of Commerce estimates a limited export impact of $400 million, provided global market conditions remain favorable.