KARACHI – Donald Trump led US government jolted world economy with the imposition of 10% tariff on all imports into the United States, and it raised concerns about its impact on almost all industries, while Pakistan’s textile sector remains at the centre to bear the brunt.
The textile industry of South Asian nation remains one of the key contributors to the country’s export economy, and America remains one of Islamabad’s biggest trading partners, and experts warn that these new tariffs could dent Pakistani textile products in the American market.
In the first seven months of FY2025, exports to the US totaled $3.6 billion, with textile and apparel products accounting for 79% of that total, which equates to around $2.8 billion. With the role of textile industry in Pakistan’s export economy, the new tariff could have long-term consequences.
Experts said tariffs will directly affectthe purchasing power of American consumers, which could cut consumer demand, affecting Pakistan’s textile exports to US, which could face tougher competition from other countries.
If demand for Pakistani textile goods falls, it will also negatively impact the country in a bigger picture. The textile sector, which is already trapped with plethora of issues, long enjoyed a strong position in the US market, but the new tariffs could make its goods less attractive compared to those from countries like India, Bangladesh, and Vietnam.
Blessing in disguise?
Another situation could make some difference, as there may be an opportunity for Pakistan to gain market share if it can negotiate better terms and improve its competitive edge.
Pakistan holds a cost advantage over countries like Vietnam and China, as it faces a competitive disadvantage compared to India, Turkey, and several other nations. We, however faced 3percent snag compared to India, 19pc compared to Turkey, and 6pc compared to Jordan, Egypt, and other countries.
The new tariffs also include reciprocal tariff on Pakistani goods, compared to 26pc for India. Other countries impacted by the new tariffs include Bangladesh, Turkey, and Egypt, while Cambodia, Myanmar and other nations face some of the highest tariff rates.
The exact impact will depend on how each country negotiates its trade terms with America, but one thing is sure that textile sales in the US are expected to decline in the days to come.
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