A new regional assessment has warned that recent US import tariffs could slash Pakistan’s exports to the American market by as much as 30%, eroding competitiveness and triggering thousands of job losses across the country’s major industrial hubs.
The findings are part of the Trading Beyond Borders report, released by the Saarc Chamber of Commerce & Industry (SCCI) and the South Asian Federation of Accountants (SAFA). The study says the tariff regime has not only caused billions of dollars in capital outflows from India but has also undermined Pakistan’s price advantage in textiles, apparel and labour-intensive products.
According to the report, the United States has imposed a 10% baseline tariff on all imports, along with additional country-specific duties of 11% to 50% on South Asian economies. Pakistan initially faced a 29% tariff, later revised down to 19% after diplomatic engagement.
Even after the reduction, Pakistan’s textiles now face 20–35% tariffs, increasing landed costs by up to 18% and putting export volumes at risk of falling between 20–30%. The report estimates annual revenue losses of up to $490 million, with potential consequences for foreign exchange reserves and the current account.
The study warns that the shock is likely to hit employment in Faisalabad, Karachi and Lahore, where Pakistan’s textile and apparel industries are concentrated. Thousands of workers could face layoffs as mills contend with reduced US demand.
The report stresses that the US, Pakistan’s single largest export market, has become increasingly difficult to access due to rigid tariffs, inconsistent customs valuations, restrictions on genetically engineered goods and strict halal certification requirements. Pakistan’s placement on the US Special 301 Watch List for intellectual property weaknesses further complicates market access.
Pakistan’s exports to the US grew from $3.7bn in 2014 to a peak of $4.3bn in 2025, driven largely by textiles and leather goods. But the report warns that this trajectory may reverse under the tariff regime.
The SCCI–SAFA report says India is the most severely affected among Saarc economies, facing up to 50% cumulative tariffs on textiles, jewellery and pharmaceuticals, leading to capital outflows of over $15.5bn and rupee depreciation. A 100% tariff on certain branded drugs has further tightened pressure on Indian exporters.
Amid the shared challenges, the report urges Pakistan and India — along with Bangladesh, Sri Lanka and other regional economies — to strengthen intra-regional trade to cushion the impact of US policy shifts. Pakistan alone, it says, could unlock $2–3bn in additional exports by boosting trade with neighbouring countries.
SAFA President Ashfaq Tola said Pakistan must focus on value addition, sustainable production, improved logistics and stronger export financing systems to diversify away from overreliance on the US market.
The report also highlights long-standing US concerns, including Pakistan’s frequent use of Statutory Regulatory Orders (SROs) to change duties without consultation, inconsistent customs valuations and stringent halal certification rules under SRO 237 of 2019, which Washington says were not properly notified to the WTO.
Pakistan’s ban on US beef imports remains in place, though both sides reached a preliminary agreement in February 2023 to resume trade subject to certification requirements.
The study notes that Saarc remains one of the least integrated regions in the world, with intra-regional trade making up only 5–6% of total trade — far below the EU’s 60% and Asean’s 22–25%. This lack of regional integration, it says, has amplified the impact of US tariffs on South Asian economies.
