Analysts saw immediate obstacles and long -term opportunities for Pakistan after the president of the United States, Donald Trump, imposed on Thursday a 29 percent tariff on the goods that imports from the United States of Pakistan, along with duties in dozens of countries, from rivals to allies, intensifying a global commercial war.
The United States imposed reciprocal tariffs of 29pc to Pakistan, which charges at 58pc from the USA, according to a Board Trump held during his announcement.
Ali Hasanain, an associate professor of Economics in Lums, said that “the United States is one of Pakistan’s most important business partners, and with which we direct the greatest commercial surpluses,” and added that almost a fifth of the country’s exports were destined for the United States.
He stressed that exports to the United States were less than 1.5pc of Pakistan’s GDP.
“Even if these are completely eliminated, which is very unlikely, the impact will be smaller than several times that we have reduced our economy through our own bad management,” he said.
In case this would affect relations between the United States and Pakistan, he pointed out that relations with the US seemed to be stable but “in a low balance at this time.”
“The commercial relationship is a component of our treatment with the United States. Much more important in the short term is US support for the Pakistan IMF program,” he said. “And I, as an non -expert observer of international relations, I hope the impact is minimal.”
He stressed that, since the rates impacted the commercial relations of the United States with all countries, as a result there would be an important change in global commercial patterns, where countries will seek new options.
“However, the United States is a significant margin our largest market, and it may not be completely replaceable for Pakistani companies,” he said.
In the Pakistan pivot to other countries, he stressed that there will be some attempts to change other Pakistan markets and other important textile exports such as Bangladesh.
“Pakistan should continue to seek more diverse markets for our products, while at the same time working with other countries to join multilateral efforts to deter the United States from staying in this course, which will reduce global trade in general and cushion economic activity,” he said.
Immediate impact to be ‘negative’
Sajid Amin, economist and executive deputy director (RES) at the Institute of Sustainable Development Policy (SDPI), talking to Dawn.comHe pointed out that the immediate impact will be negative, considering that the US is the largest commercial partner in the country.
“To compensate for that, Pakistan could have to subsidize local production to be more competitive,” he said. “Somewhere, I would have to reduce local production costs” from the main exports to the United States.
“The challenge will be if the IMF will allow the country to subsidize,” he said.
He added that the long -term impact, however, remained uncertain.
“First of all, you would have to successfully compensate for the immediate negative impact,” he said.
“Secondly, Pakistan’s tariffs are less than Bangladesh and Vietnam, which can be an opportunity, but for that we would have to be innovative,” he said, adding that the medium and long -term impact would depend on how the country can compensate for the immediate negative impact of tariffs and how Pakistan can innovate in the industries where he has an advantage over other countries affected by rates.
In Pakistan retaliation measures, he declared: “Interestingly, we have imposed a 58pc tariff to the United States.
“It is already quite high: also if Pakistan’s trade is observed, as a commercial partner, the United States could be an important export destination for the country, but for the United States, Pakistan is nowhere.”
He added that, since Pakistan was a small commercial partner of the United States, the importance of commercial relations and the volume remained very little. “Then, in that sense, power, or need, to retaliate is very insignificant, therefore, I don’t think Pakistan does that,” he added.
On whether this can push Pakistan towards the alternative, he said he did not see that tariffs have a great impact, since the United States has always been one of the country’s largest commercial partners.
“Perhaps the commercial volume is affected, if we do not compensate for the impact, but the commercial patterns will continue to be the same,” he said.
‘The textile industry can face challenges’
Adil Nakhoda, economist and professor at the Karachi Business Administration Institute (IBA), said Dawn.com That exports from the country have limited themselves to textiles, which could face the most significant short -term challenges.
He pointed out that the United States was the “most important country destination market for Pakistani exports”, and that it did not see reciprocal tariffs that had an impact on foreign relations such as the United States imposed tariffs on all commercial partners, although at different levels.
In the measures that the country could take, he said that “Pakistan can consider increasing its exports of textile products invented to the EU.
“It should strengthen commercial relations with other countries, regardless of their commercial relationship with the United States,” he added.
“My opinion about this is that countries with larger commercial surpluses with the US are directed according to the proportion of their commercial surplus to total bilateral exports to the United States,” he said.
“Pakistan will have to consider obtaining textile products upstream of the US. To reduce this relationship, as well as receive concessions in their exports (it is likely that products with US content receive a certain level of tariff concessions).”
Pakistan-American ‘even more transactional’ relationship
Khurram Husain, business and economic journalist, said that the imposed rates would cause ties between the two “even more transactional” countries.
He also stressed that alternative markets for exports in the country “would take a long time to cultivate.”
“At this time there is no replacement for the US for Pakistani exporters,” he said, adding that the United States and the EU remained the most important markets for the country.
“Pakistan will certainly look for other countries to improve their export performance, but it will take that transition for a long time,” he added.
Interestingly, Husain said that non -textile exports “are going to suffer more.”
“Textile exports will be helped by the fact that tariffs in competition countries are all higher,” he explained
Make exports more competitive ‘
Maleeha Lodhi, former Pakistan ambassador to the United States, said the country would be affected by Trump’s rates, considering that the United States was an important commercial partner.
The textile sector of Pakistan, whose majority exports go to the United States, “will experience shock and low -margin textile categories will be exhibited,” Lodhi told Geo News.
“Pakistan will have to see how he adjusts,” he said, adding that the country would have to look for “more markets, and Pakistan will have to see how to make their exports more competitive.”
The textile sector ‘could be quite affected’
Michael Kugelman, an expert in Washington’s relations with the nations of southern Asia, said in X that “textiles (main export for Pakistan and Bangladesh) could be quite affected” as a result of the new levies.
Kugelman observed that the four nations of South Asia of India, Pakistan, Bangladesh and Sri Lanka were “already trying [with] Economic stress ”.
More to follow
