Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum, Chairman National Business Group Pakistan (NBG), has welcomed the new U.S. reciprocal tariff framework introduced under the “America First Trade Policy.” The new framework moves away from a system of uniform trade rules toward country-specific tariffs.

Pakistan secured a 19% reciprocal tariff on its U.S. exports, a diplomatic win compared to India’s 25%, plus an additional 25% as a penalty for purchasing Russian oil. In exchange, Pakistan will withdraw its 5% digital services tax and pursue a joint oil reserve project with an American firm.

“This new tariff framework presents a crucial opportunity for Pakistani exporters,” said Mian Zahid Hussain. “The 19% tariff gives our businesses a competitive edge, particularly in the textile and apparel sectors, which comprise the bulk of our shipments to the U.S. However, this advantage is fragile and its long-term benefits are not guaranteed without significant structural reforms at home.”

Mian Zahid Hussain emphasized the need for a two-track strategy to capitalize on this opportunity fully. He stated that Pakistani exporters, particularly in the textile and apparel sectors, must act swiftly to capitalize on the competitive advantage provided by the 19% tariff. He emphasized the need for urgent structural reforms to address high energy costs, enhance port infrastructure, and diversify exports into high-value sectors such as IT and engineering.

Mr. Hussain pointed out that the updated U.S. de minimis exemption now requires formal declarations and duties on most shipments, which significantly impacts small and medium-sized enterprises (SMEs).

Mr. Hussain emphasized the need for collaboration between the government and private sector to foster a competitive environment. Without substantial reforms, we risk losing our advantage. A unified focus on innovation and making business easier in Pakistan is essential.