Govt to devise strategy to lessen US tariff impact

ISLAMABAD: Prime Minister Shehbaz Sharif on Friday constituted a 12-member steering committee to deal with the fallout of the United States’ hefty 39 percent tariff on Pakistani goods.

This move follows the United States’ imposition of hefty tariffs on Pakistani goods, which could undermine the country’s export competitiveness, particularly in the textile sector.

In a notification issued by the Prime Minister’s Office, it was announced that the committee would undertake an in-depth analysis and devise policy responses to the recently announced US reciprocal tariffs.

US tariffs will hurt Pakistani products’ competitiveness, experts warn

The formation of the committee comes after US President Donald Trump enacted sweeping tariffs on multiple trading partners, including Pakistan.

The 12-member committee includes finance minister, commerce minister, petroleum minister, special assistant on industries, Federal Board of Revenue (FBR) chairman, secretary foreign affairs, Pakistan ambassador to US, Ambassador of Pakistan to World Trade Organisation (WTO), former WTO envoy Dr Manzoor Ahmad, Ijaz Nabi, Minister Trade and Investment, Washington DC, and federal secretary commerce.

In a move that has sent shockwaves across Pakistan’s economy, President Donald Trump signed an executive order imposing a flat 10 percent tariff on almost all imports, with an additional 29 percent reciprocal tariff slapped on goods from countries like Pakistan. The tariffs are set to take effect on April 5, 2025, with the full 39 percent tariff hitting from April 9.

Pakistan’s textile exports, which make up a significant portion of the country’s $6 billion in annual exports to the US, will bear the brunt of the new duties.

A senior official, while commenting on it, warned that this would reduce the competitiveness of Pakistani products, making them pricier than those from lower-tariff countries like India and Turkey.

Trump’s decision was framed as part of his “America First” agenda, aimed at reducing the US trade deficit and boosting domestic manufacturing. He justified the tariffs by claiming Pakistan had been charging US goods a 58 percent tariff.

The move replaces Pakistan’s trade benefits under the Generalized System of Preferences (GSP), which had offered lower duties on certain goods, and will likely lead to job losses in export-driven sectors.

In response, Pakistan’s new steering committee, comprising top officials and diplomats, will oversee efforts to negotiate with the US and seek a way to mitigate the damage.

While some goods, like copper and pharmaceuticals, are exempt from the reciprocal tariffs, most of Pakistan’s major exports to the US, including textiles, will be hit hard.

However, some industry figures have suggested the impact may be less severe than feared, pointing to higher tariffs faced by regional competitors such as Bangladesh.

This dramatic tariff escalation signals a new phase in global trade tensions and could alter the landscape for Pakistan’s trade relationship with the US for years to come.

Copyright Business Recorder, 2025