US tariff cuts open golden window for Pakistani exports

Pakistan faces what Kamran Khan describes as a “golden moment” as the United States opens its markets to Pakistani exports with sharply reduced tariffs. But he warns the opportunity could slip away if Islamabad fails to address chronic bottlenecks in its export sector.

In his vlog, Khan noted that President Donald Trump on July 31 imposed a 19% tariff on Pakistani goods — far lower than the initially proposed 29% and significantly below tariffs on regional competitors. India faces a 50% tariff, China 30%, while Bangladesh, Sri Lanka, Taiwan and Vietnam are subject to 20%.

“This is the moment when Pakistan can attract billions of dollars in foreign investment into its export industries,” Khan said, pointing to sectors such as textiles, agriculture, information technology and manufacturing.

The change makes Pakistani goods more competitive in the world’s largest economy. The United States is already Pakistan’s top market for textiles, which account for 80% of Pakistan’s exports to America.

In 2024, Pakistan exported about $5.1 billion worth of goods to the U.S. while importing roughly $2.1 billion, bringing total trade to $7.3 billion. With reduced tariffs, Khan said, exports could diversify beyond textiles to rice, other agricultural products, surgical instruments and IT services.

The heavier tariff on China could also benefit Pakistan. Khan argued that Chinese investors may relocate industrial units to Pakistan’s special economic zones under the China-Pakistan Economic Corridor, drawn by lower labor costs.

But major hurdles remain. “We still face expensive electricity, lack of raw materials, reduced production capacity and higher business costs,” Khan said.

Even with recent price cuts, Pakistani exporters pay about PKR 45 per unit of electricity compared to 17 to 28 in neighboring countries, he noted. Such disparities limit competitiveness despite the tariff advantage.

Khan stressed that Pakistan must act quickly to establish stable policies, remove red tape and guarantee investor security.

“If we do not take immediate steps, this chance will also slip away,” he warned. “Now is the time for Pakistan to stop being a spectator and enter the American market as a strong player.”