Trump’s new tariffs shake global trade, impact Pakistan’s exports

U.S. President Donald Trump’s decision to impose new tariffs on imports has sent shockwaves through global markets, triggering economic uncertainty. The move directly affects Pakistan, as the U.S. is its largest export destination.

Kamran Khan highlighted the implications of the tariffs, saying the new policy creates a challenging environment for Pakistan. Trump has announced a 29% tariff on Pakistani exports, up from the previous range of 5% to 35%, significantly raising costs for Pakistani businesses.

While Pakistan’s exports face higher costs, some of its competitors, including Vietnam, Cambodia, Thailand, and Bangladesh, have been hit with even steeper tariffs—up to 49%.

Kamran Khan suggests this could offer a silver lining for Pakistan, as some U.S. importers may shift business away from those higher-taxed countries.

Global retaliation and market turmoil

Major global economies, including China and the European Union, are preparing countermeasures in response to Trump’s tariff policy. Economists warn that retaliatory tariffs could slow down the global economy, with Goldman Sachs predicting a worldwide recession.

Stock markets around the world reacted sharply to the news. The Nasdaq dropped 3.2%, the Dow Jones lost 2%, and the S&P 500 futures index fell by 2.6%. Similar declines were recorded in Japan, Hong Kong, South Korea, and Europe. In India, the Nifty and Sensex indices dipped by 0.35%.

China, which is the most affected by the new tariffs, is expected to take strong action. According to the U.S. think tank Tax Foundation, Trump’s previous tariffs on China and other countries generated an additional $77 billion in revenue. White House trade adviser Peter Navarro now predicts the new policy could increase customs revenue nearly ninefold, reaching $700 billion.

Trump defended his decision, saying countries that have taken advantage of the U.S. in trade will now face consequences.

Pakistan’s export dilemma

The U.S. imported $4.11 trillion worth of goods in 2024, including $438 billion from China. The new tariff policy will significantly impact Chinese exports, with some categories now facing a 54% duty.

For Pakistan, the U.S. remains a crucial trade partner. Last year, Pakistan’s total exports stood at $30.96 billion, with 18%—about $5.5 billion—going to the U.S. According to the State Bank of Pakistan, exports to the U.S. during the first eight months of the current fiscal year reached $4 billion, a 10% increase from the previous year.

With tariffs set to rise, the key question is how countries like China and the European Union will respond. Kamran Khan notes that Pakistan must carefully strategize its next move to navigate the new global trade landscape.