KARACHI Founder Salt Manufactures Association of Pakistan (SMAP) Ismail Suttar has said that reciprocal tariff of 29 percent is the last nail hammered on Pakistan export coffin.
US President Donald Trump on Wednesday 2nd April 2025 triggered a shockwave in the global trade market by introducing reciprocal tariffs on over 180 countries.
Whether this benefit the US in the long run would depend on the broader economic and strategic context but as of today it has stirred a panic situation among Pakistani exporters.
SMAP Ismail Suttar said that Pakistan’s economy is heavily reliant on textile, apparel, surgical instruments and salt, a significant portion of which goes to the US. Although Salt exports are peanuts compared to other products but it still holds 60% share in US market.
Introducing tariffs will largely impact the consumption of these products in the US as we will loose price competitiveness to other exporters, hence decreasing our product demand and later on exports. This is a fall that we cannot take considering our ongoing economic crises.
The Government of Pakistan should adopt a multi-pronged strategy to mitigate the economic and diplomatic impact suggests Ismail Suttar otherwise we are more exposed to the threat that the EU might also reassess its trade policies toward Pakistan based on US actions.
Time is of the essence and we should open all diplomatic channels with US trade officials to negotiate exemptions or tariff reductions, emphasizing on mutual benefits says Ismail, some sources also claim that Vietnam is already on its way to the Washington to re-adjusts tax before they are officially imposed on 9th April 2025.
Pakistan designed a duty structure of 58% on American products but that was to control our imports in order to reduce trade deficit, a reciprocal tariff of 29% on Pakistan’s export product to US will bring us back to the similar situation of large trade deficit due to reductions in export value as well.
The idea behind US sudden decision is to kick start their own production and improve manufacturing industries in the US, but this step can be fatal for Pakistan’s economy as our SME sector is leading the exports from front and they are already combating with a lot of competitors to secure their position in the US export market.
American Dollar Exchange Rate