• Fitch says that tariffs are higher in a century; Smaller countries hit with larger rates
• Islamabad slapped with 29pc ‘reciprocal rate’ against estimates of 58pc charged to us
• Non -Tariff Barriers, Use of SRO and Internet stops cited to justify the Rate for Pakistan
Washington: The radical tariffs of President Donald Trump about US imports caused retaliation threats on Thursday, since companies and governments rushed to tell the costs of a growing commercial war that threatens to shake global alliances.
The announced sanctions unleashed the turbulence in the world markets and caused the conviction of other leaders who face the end of an era of liberalization of trade that has shaped the global order for decades.
According to Fitch qualifications, the new US rates are the highest in more than a century. Imports to the world’s largest consumer market now face an average duty of 22.5pc, compared to 2.5 percent last year.
Trump said he would impose a baseline rate of 10 percent to all imports to the United States and the highest specific tariffs in some of the largest commercial partners in the country, hammering goods of Italian coffee and the Japanese whiskey to sportswear made in Asia. The president affirms that “reciprocal” tariffs are an answer to barriers that are imposed on US assets.
Economists said tariffs could rekindle inflation, increase the risk of a recession of the United States and increase the costs of the average American family for thousands of dollars, a potential responsibility for Trump that campaigned with the promise to reduce the cost of living.
Some of the greatest increases fell into the impoverished countries of Africa, but Canada and Mexico, which have free trade agreements with Washington, escaped the imposition of reciprocal tariffs.
But Madagascar, one of the poorest nations in the world with Gross Domestic Product (GDP) by head of just over $ 500, faces a 47 percent tariff on the modest $ 733 million of vanilla exports, metals and clothing he made with the United States last year.
The frankness of the formula applied to economies that cannot be imported much from the United States inevitably leads to a high reciprocal account: 50pc for Lesotho in southern Africa, 49pc for Cambodia in southeast Asia.
But the formula is also sowing confusion among rich countries. For the European Union (EU) it has produced a 20PC punitive rate, four times the 5PC that the World Trade Organization (WTO) calculates as the EU average rate rate.
Case against Pakistan
According to the figures published by the White House, Pakistan is being beaten with a reciprocal rate of 29pc. Apparently, this is an answer to 58pc tariffs charged to the US, which also include “commercial currency manipulation and barriers.”
Officials of the Ministry of Commerce told Dawn that they were still evaluating the impact of the increase in rates on Pakistan exports, since the United States is the leading export market for Pakistani textile products.
According to the National Commercial Estimation Report on Foreign Trade Barriers, published by the Office of the United States Commercial Representative, Washington believes that despite the reduction of rates applied since 2013, US companies have cited concerns that Pakistan has imposed high rates of fees and, in some cases, additional duties, in products such as cars and finished products.
In addition, Pakistan grants specific import taxes in the sector and products, concessions and protections through the promulgation of legal regulatory orders (SRO), which can be issued without consultation of the parties by the important ones or providing time to importers to guarantee compliance.
Under non -tariff barriers, the USTR says that the country allows the importation of certain goods only by the public sector or industrial consumers, but some imports require approvals of federal level ministries.
In addition, Ustr notes, exporters of food and consumption products have expressed concern regarding the lack of uniformity in the assessment of customs in Pakistan that negatively affects the American interested parties.
Although Pakistan has made gradual improvements to better coordinate its efforts to apply intellectual property (IP) and update its intellectual property laws, serious concerns remain, particularly in the application area, the document points out.
It also takes in trouble with measures such as government movements to promote data location, as well as routine practice to block access to Internet services, mobile data and social media platforms.
“Although the Pakistani law allows the repatriation of profits, the United States and other companies continue to face bureaucratic gain bureaust obstacles, dividends and royalties of Pakistan, generally coinciding with the government’s approach in the elimination of US dollars,” he says.
“The local franchises of American brands report limitations and delays extended in the referral funds to the United States as a result of SBP policies,” he says.
It also maintains that the application of the contract can be difficult for us and other foreign investors in Pakistan due to significant delays and the lack of compliance with judicial decisions.
USTR also points out that Pakistan has one of the lowest fiscal relations and GDP taxes in the world: 9 percent in fiscal year 2010.
“Pakistan depends largely on multinational corporations for income generated by tax collection. Foreign investors in Pakistan regularly report that federal and provincial tax regulations are difficult to navigate, often citing the lack of transparency in the evaluation of taxes,” he says.
The document also mentions corruption and a weak judicial system as substantial disincentives for foreign investment. Although he mentions the National Responsibility Office, he points out that “the interested parties of the Business and Civil Society have expressed reserves about the perceived body’s effectiveness and politicization.”
Business sound alarm
Companies around the world also faced a future of higher prices, commercial agitation and reduced access to the world’s largest market after Trump confirmed their worst fears.
The head of the WTO, Ngozi Okonjo-Iweala, warned that the measures “would have substantial implications for world trade and the prospects for economic growth.”
“It is clearly not good news for (the) global economy, stability and commerce,” said Maersk, the world’s second largest container shipping company in the world, in a statement.
With AFP and Reuters entrance
Posted in Dawn, April 4, 2025
