Pak-US trade ties

2026-02-22 - 00:23

PAKISTAN and the United States have underscored the importance of the strategic relations and expressed satisfaction over the momentum and positive trajectory of the partnership under the leadership of President Trump. During a meeting of Prime Minister Shehbaz Sharif with Secretary of State Marco Rubio, the two sides agreed to enhance bilateral trade and economic activities and mutual cooperation in countering terrorism. Pakistan and the United States enjoy a robust economic relationship and this assumed a new dimension when Washington agreed to slap a 19% tariff on imports from Pakistan in exchange for measures aimed at boosting US exports to the country. The 19% tariff was seen as a token concession in view of the fact that much higher duties were imposed on imports from India and 20% on Bangladesh but this advantage has eroded within weeks with the signing of new deals both with New Delhi and Dhaka. The U.S. is the primary market for Pakistani textiles, including knitwear, house linens and garments, which form the bulk of the export volume. As per new deals, India goods will face an 18% tariff besides category-specific concessions, which will negatively affect Pakistani exports to the United States. Similarly, Washington’s decision to grant zero-duty access to a large share of Bangladeshi garment exports, provided they are produced from cotton imported from the United States is also expected to harm Pakistan’s textile exports. It was in this backdrop that Pakistan is approaching the United States for downward revision of the tariff and an equitable treatment vis-à-vis textile articles produced from cotton imported from the US as, in 2025, Pakistan imported about US$1 billion worth of cotton from the United States. There is an impression and rightly so that Pakistan was not able to secure its trade interests effectively and hurriedly agreed to a lopsided deal with the United States. However, there are bright prospects for its revision given the level of political goodwill that exists between the leadership of the two countries which was also reflected in the Shehbaz-Rubio meeting.