Foreign Office Spokesperson Shafqat Ali Khan stated on Thursday that Pakistan was monitoring the issue of tariff imposition by the United States and the recent suspension affecting most countries.
During the weekly press briefing, the FO spokesperson commented that given the interconnected nature of global commerce, the imposition of tariffs could have widespread consequences and stressed the importance of a mutually advantageous resolution to the matter.
Last week, US President Donald Trump further intensified the trade dispute by announcing a baseline tariff of 10% on all imports, higher duties on key trading partners of the United States, and a 29% tariff on Pakistan.
Following several days of turbulence in global markets, Trump announced on Wednesday that he would temporarily suspend many of his new tariffs for 90 days, even as he increased tariffs further on imports from China.
“I have authorised a 90-day PAUSE” on the higher tariffs that took effect on Wednesday, Trump said on his Truth Social platform, adding that he made the decision after over 75 countries had reached out to negotiate and had not retaliated against the United States.
Only a flat rate of 10% tariffs on all countries, which came into effect on Saturday, will remain in place. This represented a significant reversal from often punitive levies that affected even many of the closest US allies.
According to a report by the Islamabad-based think tank Tabadlab, Pakistan could face an estimated export loss of $564 million in the fiscal year 2025-26 due to the steep new tariffs imposed by the US under President Donald Trump’s latest trade policy shift.
Pakistan will dispatch a delegation to the US in the coming weeks to negotiate the new tariffs, the government announced before Donald Trump declared a delay to the measures, reported AFP.
Concerns about the potential repercussions remain, and if negotiations are unsuccessful, the textile sector, which accounts for over half of Pakistan’s exports to the US, is expected to bear the brunt of the impact. Given the high price sensitivity of US consumers, Tabadlab projects that demand could decline by at least 13% by FY2025-26. If Pakistan experiences losses in both market share and demand, export losses could escalate to $2.17 billion in a worst-case scenario.
“These tariffs may erase recent gains in exports across key sectors, undermining current account stability and compounding an already fragile economic outlook,” the report cautioned.
Pakistan’s total annual exports to the US currently amount to approximately $6.3 billion. The new duties pose a significant threat at a time when the country is striving to bolster its external account and stabilize economic growth.
Data on Pakistan’s trade with the US indicates that imports from the US stood at $1.87 billion in 2024, accounting for just 4.0% of Pakistan’s total imports. The US share in Pakistan’s top five import segments was even lower, at 1.4 per cent, suggesting minimal reliance on American goods.
Top US exports to Pakistan include pharmaceuticals ($147 million), machinery ($143 million), and iron and steel ($190 million). However, the tariff revenue generated from these imports remains modest — only $85 million — with an average effective tariff rate of 4.5%, significantly lower than Pakistan’s overall import tariff average of 8.0%.
According to the Trump administration’s calculations, Pakistan levies 58% tariffs on goods from the US.
The administration employed what economists describe as a misleading formula to calculate the tariff rate (dividing the US trade deficit with a country by the total US imports from that country).
Pakistan’s zero tariff on US cotton and limited protection for sectors such as scrap metal or medical equipment mean that there is little immediate opportunity for reciprocal tariff leverage in negotiations.
Global Undergraduate Exchange Programme
Regarding the discontinuation of the Global Undergraduate Exchange Programme (Global UGRAD) for Pakistani students, the FO spokesperson stated that the decision marked the end of a 15-year engagement that played a crucial role in fostering academic and cultural connections, as well as strengthening bilateral ties with a focus on education, science and technology, and people-to-people exchanges.
In response to a question, the FO spokesperson clarified that the ongoing repatriation of illegal foreign nationals from Pakistan was being conducted within a legal framework, and the individuals were permitted to return to Pakistan after obtaining the necessary visas.
He emphasized that Pakistan had been exceptionally generous in hosting Afghan nationals compared to any other country globally and reiterated the government’s policy of ensuring the dignified return of those residing illegally.
