The United States’ sweeping import tariffs are projected to slash Pakistan’s exports to Washington by up to 30%, eroding competitiveness in key sectors like textiles and apparel, while triggering thousands of layoffs in industrial hubs such as Faisalabad, Karachi, and Lahore, according to a new joint report by the SAARC Chamber of Commerce & Industry (SCCI) and the South Asian Federation of Accountants (SAFA).
Price competitiveness of Pakistani textiles eroded as new US tariff regime lifts landed costs by up to 18%; report says Islamabad could offset losses by unlocking $2–3 billion in regional export potential
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Titled Trading Beyond Borders, the assessment reveals that tariffs ranging from 20% to 35% have inflated landed costs for Pakistani goods by up to 18%, potentially causing annual revenue losses of $490 million and straining foreign exchange reserves. Pakistan’s exports to the US, which grew from $3.7 billion in 2014 to a peak of $4.3 billion in 2025—driven by labor-intensive industries—now face a 20–30% volume decline.
The report also highlights India’s severe exposure, with cumulative tariffs up to 50% on textiles, jewelry, and pharmaceuticals potentially reducing exports by 40% and sparking over $15.5 billion in capital outflows. Among SAARC nations, Sri Lanka faces the steepest hit at 44% tariffs, threatening its apparel sector, which relies on the US for over 40% of exports.
“These disproportionate impacts underscore South Asia’s overreliance on the US market for textiles, garments, and manufactured goods,” said SCCI President Md. Jashim Uddin. “Pakistan’s initial 29% tariff was reduced to 19% through diplomacy, but non-tariff barriers like inconsistent customs valuations, halal certification mandates, and Special 301 Watch List status continue to hinder access.”
SAFA President Ashfaq Yousuf Tola urged regional diversification: “Pakistan could unlock $2–3 billion in additional annual exports by boosting trade with India, Bangladesh, Sri Lanka, and GCC countries, leveraging SAFTA’s potential despite its 13.6% average tariffs and sensitive lists excluding 35% of goods.”
Recommendations include value addition, sustainable standards, improved logistics, and export financing. SAARC’s intra-regional trade—stagnant at 5–6% versus ASEAN’s 22–25% or EU’s 60%—must rise through streamlined customs and infrastructure.
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The report calls for urgent policy reforms to mitigate tariff shocks and foster resilience amid global trade disruptions.
