The much-trumpeted “strategic” trade and investment agreement between Pakistan and the United States has been hailed by officials as a breakthrough. On paper, it promises to ease the tariff burden on Pakistani exports to America — our single largest market. In reality, however, the gains are modest at best. The reduction in US reciprocal tariffs from 29pc to 19pc merely puts us on equal footing with most competitors, rather than giving Pakistan a decisive edge. Avoiding a steeper tariff is a relief, but it is far from a triumph.
The erosion of our earlier advantage is striking. Not long ago, Vietnam and Bangladesh faced US duties as high as 46pc and 37pc respectively, giving Pakistan a clear head start. Today, those tariffs have been cut to 20pc, wiping out the gap. We now stand in virtual parity with our rivals, losing the window to secure preferential market access that could have triggered a meaningful surge in exports.
This disappointment is compounded by uncertainty. Washington has yet to release full details of the deal, leaving its actual benefits unclear. President Trump’s executive order links tariff revisions to broader security and economic cooperation. Failure to follow through could invite an additional 10pc duty — a sword hanging over any trading partner deemed uncooperative. Pakistan, according to the order, is among those that have either finalised or are close to finalising such commitments. But until the pact is formally signed, the risk of punitive taxes remains very real.
The geopolitical dimension cannot be ignored. If India, despite currently higher tariffs, manages to secure a more favourable deal in the coming weeks, whatever perceived advantage we hold will vanish overnight. The agreement with Washington may buy us some breathing space, but it is also a sobering reminder of deeper structural weaknesses. High energy costs, punishing taxes, policy inconsistency, and sluggish economic diplomacy continue to sap our competitiveness.
Without tackling these underlying issues and pushing for truly preferential access, Pakistan will remain stuck in the same race — running hard, but never getting ahead.
