The Pakistani government has yet to finalize a comprehensive strategy to address the recent imposition of a 29% reciprocal tariff by the United States on Pakistani goods. This delay has raised apprehensions among exporters, particularly in the textile sector, about the potential adverse effects on trade.​

Government’s Deliberations

Commerce Minister Jam Kamal convened a meeting with top textile exporters to discuss potential responses to the US tariffs. He assured that Pakistani trade officials and the ambassador in the US are actively communicating with their counterparts to convey Pakistan’s concerns. However, specific strategies or policy measures were not disclosed during the meeting, leaving exporters uncertain about the government’s preparedness.​

Exporters’ Apprehensions

Exporters have expressed unease regarding the commerce ministry’s perceived lack of readiness to tackle the post-tariff scenario. The absence of a clear strategy has led to concerns about maintaining competitiveness in the US market, especially as neighboring countries like Vietnam and Bangladesh have proactively engaged with the US to negotiate terms.​

Policy Recommendations

The Policy Research and Advisory Council (PRAC) of the Karachi Chamber of Commerce and Industries has suggested that Pakistan consider offering reciprocal tariff reductions to the US on strategic products such as soybean, machinery, and cotton. Implementing zero duties on products provided to China and Gulf Cooperation Council countries under preferential trade agreements could also be a viable approach. Engaging proactively with US trade officials to discuss potential tariff adjustments is deemed critical to safeguarding Pakistan’s market share in the US.​

Conclusion

As the government deliberates on its course of action, the urgency to formulate and implement a clear strategy is paramount to mitigate the impact of the US tariffs on Pakistan’s exports. Proactive engagement and policy adjustments will be essential to navigate this challenging trade environment.