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10% US Tariffs on Pakistani Exports 2025: What It Means for Businesses

The recent announcement by the Trump administration regarding new tariff policies has sparked concerns globally, especially among export-driven economies like Pakistan. With the introduction of a 10% baseline tariff on all imports into the U.S. and potential reciprocal tariffs, Pakistani exporters are uncertain about the future of their trade relations with the United States.

Let’s break down how these tariffs might impact Pakistan’s economy, key industries (especially textiles and fashion), and possible business strategies to mitigate these effects.

1. Understanding the New US Tariff Policy

The Trump administration's "Liberation Day" tariffs introduce two key changes:

  • 10% Baseline Tariff: Every country exporting to the U.S. will face at least a 10% tariff on their goods.

  • Reciprocal Tariffs: Additional tariffs may be imposed based on the duties that other countries impose on U.S. goods.

For Pakistan, while the exact reciprocal tariff rate is yet to be announced, there is a possibility of higher duties on key export products, especially textiles.

2. How US Tariffs Impact Pakistan’s Economy

A. Threat to Export Competitiveness

Pakistan’s exports to the U.S. are already small (around 0.15% of total U.S. imports). However, increased tariffs could make Pakistani products more expensive in the U.S. market, reducing demand and further widening Pakistan’s trade deficit.

B. Impact on the Textile Industry

The textile sector is Pakistan’s largest export industry, with the U.S. being a key buyer. Currently, some Pakistani textiles face tariffs of up to 17%, and the new tariff regime could add another 10% or more, making Pakistani textiles less competitive compared to other low-cost producers like Bangladesh or Vietnam.

C. Potential Effects on the Footwear & Fashion Industry

For businesses dealing in handmade shoes, shawls, and clothing (like Kinocart), the cost of exporting to the U.S. may rise, making it harder to compete with local U.S. brands or duty-free suppliers. However, since Kinocart’s products are primarily targeted at local and regional markets, the direct impact may be limited.

D. Business Concerns & Economic Uncertainty

  • Pakistani exporters are worried about declining orders from U.S. buyers.

  • The Pakistani Rupee’s volatility could further increase costs for businesses relying on imported raw materials.

  • Local businesses must look for alternative markets, such as Europe, China, and the Middle East, to reduce dependence on the U.S.

3. Pakistan’s Fashion Industry & Tariffs: Challenges & Opportunities

Challenges for the Fashion Industry

  • Higher costs for Pakistani exporters due to the 10% baseline tariff.

  • Uncertainty regarding reciprocal tariffs, which could further increase prices.

  • Potential reduction in demand for Pakistani-made fashion products in the U.S. market.

Opportunities for Local Businesses

  • Focus on Domestic & Regional Markets: Since Kinocart and similar businesses cater to a local audience, the impact may be minimal. There could even be increased demand for locally made products as imported goods become more expensive.

  • Export to Non-US Markets: Middle Eastern and European buyers may offer better trade conditions than the U.S.

  • Strengthening E-commerce Presence: Pakistani brands can sell directly to global consumers through Shopify and other platforms, bypassing intermediaries and improving margins.

4. What Can Businesses Do to Adapt?

✅ Diversify Export Markets

  • Focus on expanding to Europe, the Middle East, and Asia, where tariffs may be lower or trade agreements more favorable.