Businessmen Urge Govt to Tap US Tariff Advantage for Export Growth

Businessmen have urged the government to capitalize on the US tariff competitive advantage over various regional economies by drastically reducing the cost of production and improving the ease of doing business across the country, particularly for export and other potential sectors. They recommended that the government continue negotiations with the US administration to secure additional tariff discounts, especially for selected sectors such as textiles, leather, and food products. Currently, Pakistan faces a tariff of 19%, compared to competitive economies like Bangladesh (20%), Vietnam (20%), India (25-50%, varying), and China (50%, varying). President of the Federal B Area Association of Trade and Industry (FBATI), Sheikh Muhammad Tehseen, stated that the latest tariff rate on Pakistani products imposed by the US may hurt export volumes in the short term, but it could lead to a gradual increase in both volumes and values in the future. While the 19% tariff rate appears favorable for Pakistani export growth in the US market compared to other countries, the high cost of production in Pakistan relative to its competitors may hinder the desired outcomes for “Made-in-Pakistan” brands. The Pakistani government should evaluate the production costs and ease of doing business in these competing markets and devise a strategy to boost the country’s exports globally, the FBATI President remarked. He further emphasized that the government must work extensively to reduce production costs for the export sector by lowering utility expenses, including electricity, gas, and water, to significantly penetrate the US market. Majyd Aziz, Former President of the Karachi Chamber of Commerce and Industry (KCCI), noted that the US administration under President Trump has provided an opportunity to reshape Pakistan’s export culture. However, it will depend on the government and exporters to maximize this advantage. He added that while Pakistanis are pleased that India has been subjected to a 50% baseline tariff (plus an additional 10%), the downside is that, unlike Pakistani policymakers, the Indian government is likely to provide subsidies, reduce infrastructure costs, and offer maximum facilities to exporters to mitigate the impact of the high tariff rates. “This is the time to revisit Pakistan’s export policy and make all-out efforts to provide more support to exporters. Otherwise, Pakistani exports will only grow at a snail’s pace,” he remarked. He also urged Pakistani exporters to improve productivity, enhance efficiency, reduce waste, focus on the circular economy, and avoid ad hoc measures while adopting best business practices. By doing so, Pakistani exporters could attract foreign buyers and encourage them to prefer imports from Pakistan, especially since textiles from China, Vietnam, Bangladesh, and Cambodia already have a strong presence in the US market. Muhammad Babar Khan, Central Chairman of the Pakistan Hosiery Manufacturers Association (PHMA), stated that Pakistan could take advantage of the recent US tariff policy by filling the gaps expected to arise from reduced Chinese exports. He suggested that Pakistani companies, in collaboration with Chinese investors, could boost the exports of “Made-in-Pakistan” products to the US market. “Chinese textile companies could either invest in Pakistani companies or set up their factories in Pakistan’s export zones in collaboration with local partners as part of a strategy to retain their share in the US market. This partnership could prove to be a win-win situation for all parties,” he added. Business leaders also expressed optimism that granting US companies access to Pakistan’s oil and gas, mining, and mineral sectors could attract foreign investment. This, in turn, could strengthen bilateral trade ties between the two countries and lead to more favorable tariff rates for Pakistani exporters.