ISLAMABAD: Pakistan has been hit with a 19% tariff on its exports to the United States under a sweeping new trade directive issued by former US President Donald Trump, who has reintroduced steep tariffs targeting dozens of countries. The new rate, a reduction from a previous 29%, was finalized just as a new trade deadline passed on August 1.
The tariff decision came only a day after the United States and Pakistan signed a significant bilateral trade agreement in Washington, along with a joint oil development deal. Trump announced the breakthrough via a post on his social media platform, Truth Social:
“We have just concluded a deal with the country of Pakistan, whereby Pakistan and the United States will work together on developing their massive oil reserves.”
The joint venture is being seen as a strategic win for Pakistan, especially considering it secured a lower tariff rate than several regional peers. Under the newly imposed US tariff structure, India faces 25%, Bangladesh 20%, Iraq 35%, Vietnam 20%, and Indonesia also 19%.
Sources say that Field Marshal Asim Munir’s meeting with Trump, along with robust efforts led by Finance Minister Muhammad Aurangzeb, played a pivotal role in easing the pressure on Pakistan. Aurangzeb called the outcome a “real win-win deal” that shielded Pakistan from more aggressive trade penalties.
The new executive order sets varying tariff rates — ranging from 10% to 50% — on 69 nations, with some, like Brazil and Switzerland, facing rates as high as 50% and 39% respectively. Countries not included on the list will be subject to a flat 10% import tax.
Trump invoked emergency powers and pressed international partners to negotiate before the August 1 deadline, part of a broader strategy to boost US manufacturing and reduce trade deficits. While the markets reacted cautiously, with modest drops in Asian stocks and futures, economists warned of rising inflation and consumer prices due to the tariffs.
The order also contained harsh measures against Canada, raising fentanyl-related product tariffs from 25% to 35%, while Mexico was granted a 90-day reprieve to finalize a broader agreement.
Trump’s actions come amid ongoing tensions with India, where trade talks have stalled over agricultural access and purchases of Russian oil. Indian exports now face a 25% tariff, triggering political backlash in New Delhi and a slide in the Indian rupee.
While details about enforcement and “rules of origin” are yet to emerge, more trade deals are expected to follow in the coming days.
