ISLAMABAD
\nPakistan\u2019s export sector is bracing for a sharper downturn as a new report by the SAARC Chamber of Commerce & Industry (SCCI), the apex regional trade body, and the South Asian Federation of Accountants (SAFA) warns that the United States\u2019 19 percent reciprocal tariff is eroding competitiveness, disrupting orders and deepening economic vulnerabilities.
\nThe report, which examines the impact of U.S. tariff escalation across all SAARC countries, identifies Pakistan as among the most exposed due to its heavy reliance on textile and apparel exports to the United States.
\nAccording to Gwadar Pro, the study notes that Pakistan \u201cwas initially subjected to a 29% tariff,\u201d but even after negotiations brought it down to 19 percent in August 2025, the reduction \u201cdid not entirely prevent short-term losses,\u201d particularly in textiles, the backbone of the country\u2019s exports.
\nThe SCCI-SAFA report states that Pakistan\u2019s \u201cexport footprint to the United States, primarily in textiles, rendered it vulnerable to reciprocal levies,\u201d adding that the new duties \u201chas increased the landed cost of Pakistani textiles and apparel by up to 18 percent,\u201d contributing to a \u201cdecline in export volumes of 20-30 percent.\u201d
\nThink tanks cited in the study warn that export revenues could fall by \u201c20-25 percent\u201d if tariff pressures persist, threatening the rupee, foreign reserves and industrial employment.
\nThe report further cautions that Pakistan\u2019s \u201cdelicate macroeconomic situation implied that currency, inflation, and fiscal stability could be further affected by diminished export earnings.\u201d
\nTextile exporter and former Karachi Chamber of Commerce and Industries (KCCI) Vice-President Tanveer Barri said the impact is already being felt on the ground. \u201cThe 19% U.S. tariff makes Pakistani exports more expensive for American buyers, which is expected to erode their competitive edge and potentially lead to a decline in exports, job losses, and pressure on the Pakistani rupee,\u201d he told Gwadar Pro.
\nHe added that Pakistan\u2019s key earners\u2014 textiles, leather goods, surgical instruments, and sporting goods \u2014 operate on tight margins and \u201cwill bear the brunt of the added cost.\u201dMuhammad Jawed Bilwani, former president of the Karachi Chamber of Commerce and Industry (KCCI) and a leading voice for textile and value-added exporters, described worsening conditions for manufacturers.
\n\u201cUnemployment has already increased and it\u2019s rising every single day. Spinning units in the textile sector are shutting down, weaving units are shutting down as well,\u201d he told Gwadar Pro. \u201cThe reason is that tariffs have gone up, and on top of that, electricity has become extremely expensive.\u201d
\nWhile acknowledging the external shock of 19% tariff, he cautioned that domestic inefficiencies remain central: \u201cBefore blaming tariffs alone, we must confront our own cost structure, energy prices, logistics bottlenecks, and inconsistent policies. A more competitive base lowers vulnerability to external shocks.\u201d
\nIslamabad-based economist Malak Tanveer Ahmad said the full effect of the tariff has yet to unfold due to the way export orders are scheduled. \u201cThe US has slapped a 19% tariff on Pakistani products, which will significantly increase their landed cost,\u201d he told Gwadar Pro.
\n\u201cThe tariff was imposed in August, and\u2026 the full impact will appear at the end of January and February. The real hit is coming in the next cycle of orders.\u201d Still, some analysts see a mixed landscape. Sardar Shuakat Popalzai, President of the Balochistan Economic Forum, told Gwadar Pro that while the tariff has raised costs, Pakistan\u2019s relative position in the region has improved.
\n\u201cThe United States imposed a reciprocal tariff\u2026 initially around 29%, later revised downward to roughly 19%. While this tariff has increased the landed cost of Pakistani goods\u2026, it has not eliminated Pakistan\u2019s competitive edge. In fact, Pakistan currently enjoys the lowest tariff rate in South Asia, with U.S. duties on India and Bangladesh set higher.\u201d
\nHe argued that this could spur modernization and export diversification, saying the tariff environment \u201chas pushed Pakistani industries to improve efficiency, upgrade quality, and diversify their product range, strengthening long-term resilience.\u201d
\nEconomist Subhan Ansari said the findings of the SCCI-SAFA report aligns with market observations. \u201cThe tariff escalation by the United States would unquestionably tighten the squeeze on Pakistan\u2019s textile and garment exporters,\u201d he told Gwadar Pro. \u201cWhen your largest buyer suddenly adds 15\u201320% to the landed price, you lose competitiveness overnight. So yes, a 20\u201330% hit to export volumes is very much within the realm of possibility.\u201d
\nThe SCCI-SAFA report also stresses broader vulnerabilities. It warns that Pakistan\u2019s delicate macroeconomic position means \u201ccurrency, inflation, and fiscal stability could be further affected by diminished export earnings.\u201d The U.S. market accounts for more than 80 percent of Pakistan\u2019s textile and apparel shipments, and the report estimates annual revenue losses of up to USD 0.49 billion under the new tariff structure.
\nAt the policy level, the study urges Pakistan and other South Asian economies to diversify trade partners to reduce exposure to U.S. tariff volatility. The SCCI-SAFA report finds that \u201cregional trade may allow settlement in local currencies\u201d and that expanding SAARC-based supply chains could \u201cbolster economic resilience,\u201d even though South Asia remains one of the least integrated regions globally.
\nEconomist Professor Dr. Zilakat underscored this need for broader diversification. \u201cReducing reliance on the US market cannot be achieved simply by shifting to regional trade,\u201d he said. He argued that Pakistan needs a \u201cmulti-pronged strategy\u201d extending to ASEAN, the Middle East, and East Africa, paired with upgraded standards and better-negotiated market access.
\nDespite pockets of optimism, exporters warn the immediate environment is tightening. With costs rising, orders shrinking, and global competition intensifying, Pakistan\u2019s 19 percent tariff challenge is shaping into a decisive test for the country\u2019s most critical export industries, and the livelihoods tied to them.<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD Pakistan\u2019s export sector is bracing for a sharper downturn as a new report by the SAARC Chamber of Commerce & Industry (SCCI), the apex regional trade body, and the South Asian Federation of Accountants (SAFA) warns that the United States\u2019 19 percent reciprocal tariff is eroding competitiveness, disrupting orders and deepening economic vulnerabilities. The […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-520069","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n