A comprehensive regional assessment reveals that United States import tariffs could reduce Pakistani exports to American markets by 30% and trigger significant employment losses. The report urges enhanced regional trade cooperation to mitigate these economic impacts.
According to the joint report by the Saarc Chamber of Commerce and the South Asian Federation of Accountants, US tariffs ranging between 20% and 35% have increased landed costs for Pakistani textiles and apparel by up to 18%. This erosion of price competitiveness threatens export volumes and may cause thousands of layoffs in major industrial hubs, including Faisalabad, Karachi, and Lahore.
The analysis projects potential annual revenue losses reaching $490 million, creating pressure on Pakistan’s foreign exchange reserves and current account balance. The US market represents a crucial destination for Pakistan’s labour-intensive export industries.
The report strongly recommends increased regional trade integration to counterbalance US tariff effects. Pakistan could potentially increase exports by $2-3 billion annually through expanded trade with India, Bangladesh, Sri Lanka, and Gulf Cooperation Council countries.
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SAFA President Ashfaq Tola emphasised that realising these opportunities requires Pakistan to enhance value addition, adopt sustainable production standards, and strengthen logistics and export financing mechanisms.
India faces the most severe regional impact with cumulative tariffs reaching 50% on key exports, including textiles, jewellery, and pharmaceuticals. The report documents capital outflows exceeding $15.5 billion and significant Indian rupee depreciation resulting from these trade measures.
Short-term export declines could reach 40% for high-value Indian products like smartphones and photovoltaic cells, highlighting vulnerability to external policy changes and underscoring the urgent need for market diversification.
The analysis notes that Saarc remains one of the world’s least integrated economic regions, with intra-regional trade accounting for only 5-6% of total trade volume compared to 22-25% in ASEAN and 60% in the European Union.
