Duties cut from 29% to 19%, giving Pakistani exporters a competitiveadvantage under sweeping new U.S. tariff regime——————————
In a major boost to Pakistan’s trade prospects, the United States hasgranted Islamabad the most favorable tariff rate in South Asia underPresident Donald Trump’s newly launched “Liberation Day” tariff regime.According to AP News and various economic reports, the U.S. has reduced theimport duty on Pakistani goods from 29% to 19%—a significant10-percentage-point cut that puts Pakistan ahead of regional competitorslike India, Bangladesh, and Vietnam.
The decision follows a bilateral agreement between the U.S. and Pakistaninvolving deeper cooperation on energy development, including plans toexplore and utilize Pakistan’s untapped oil reserves. President Trumpreportedly praised the agreement as an opportunity to expand U.S. energyexports while securing a stable partner in South Asia, furtherincentivizing the tariff relief.
Pakistan now enjoys a tariff rate lower than India’s 25%, Vietnam’s 20%,and Bangladesh’s 20%, positioning it as the most competitively treatedSouth Asian nation in terms of access to the American market. Thisdevelopment is expected to significantly benefit Pakistan’s textile,leather, surgical instruments, and agricultural export sectors, which havelong relied on U.S. trade for growth.
The tariff cut comes as part of Trump’s global overhaul of traderelationships, which introduced a blanket 10% duty on most imports andimposed individualized tariff rates—ranging from 10% to over 40%—oncountries based on U.S. interests and trade balances. Pakistan wasinitially placed in the 29% category, but a last-minute deal brought therate down to 19%, effective from August 7, 2025.
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Trade analysts have described the move as a diplomatic success forPakistan. It comes at a time when many U.S. allies and competitors arefacing steeper duties and ongoing negotiations. The reduction couldtranslate into hundreds of millions of dollars in annual trade savings forPakistani exporters, giving them a decisive edge over regional rivals whoare still negotiating or resisting U.S. tariff demands.
While the current relief marks a significant gain, its longevity depends onPakistan’s continued engagement with U.S. trade and energy policies. Theenergy cooperation deal was pivotal in securing the reduction, and futureconcessions may hinge on similar strategic alignments.
As global supply chains shift and the U.S. continues to exert economicpressure through customized tariffs, Pakistan’s preferential treatmentunder this policy marks a rare moment of opportunity—one that may reshapethe country’s export trajectory if leveraged effectively.