The United States has lowered its reciprocal tariff on a wide range of Pakistani goods to 19%, down from an initially proposed 29%, following a new trade deal. This was part of a broader executive order signed by President Donald Trump, imposing tariffs of up to 41% on goods from numerous countries due to persistent trade imbalances and a lack of reciprocity.

Pakistan’s 19% tariff is lower than that of several regional competitors, including India (25%), Bangladesh, Vietnam, and Sri Lanka (all at 20%). Analysts believe this could significantly boost Pakistani exports, particularly in textiles and apparel, and stimulate industrial growth. The deal also includes Pakistan importing crude oil from the US, diversifying its energy sources.

While the Pakistani government views the deal as a marker of a broader strategic partnership, some brokerage houses, like Topline Securities, consider the impact neutral, emphasizing the need for Pakistan to continue investing in R&D, energy efficiency, and business development to maintain competitiveness.

The final tariff rates for China, a major US supplier, remain pending, which will further impact the competitiveness of Pakistan and other nations. Prior to the deal, Pakistan faced a potential 29% tariff on exports to the US, which was temporarily suspended to allow for negotiations. Pakistan’s trade surplus with the US in 2024 was approximately $3 billion, primarily driven by textile exports.