Pakistan sees the opportunity in Trump’s rates

The Pakistan stock exchange immersed Schar on Monday after US President Donald Trump had imposed new radical rates on global trading partners, including Pakistan. The market fell by more than 5 percent and forced a stopping of one hour.

While Trump’s new series of ‘Liberation day“Rates have sent jitters through the business community in Pakistan, there is hope that the development could also create new business opportunities for the country.

Washington has imposed a mutual rate of 29 percent on import from Pakistan. This decision seems to be powered by the American desire to bridge the $ 2.9 billion trade deficit with Pakistan.

For Pakistan, the US is one of the few markets worldwide where the country maintains a considerable trade surplus. In recent years, the textile and clothing exports from Pakistan have risen to the American market.

Despite the newly imposed rates, the traditional export from Pakistan to the US is expected to keep their process for various reasons. The main reason is that the rates imposed on Pakistan are lower than those on his direct competitors such as Bangladesh, Vietnam and China. Although other countries, such as India and Turkey, can be confronted with lower rates than Pakistan, Islamabad will probably still benefit because of the considerably lower “per price tag per unit“Advantage compared to his direct competitors.

Pakistan enjoyed this lower price tag for his products for years. However, the country has not been able to translate this benefit into a larger market share in the US. During this challenging time, this lower price card advantage may protect Pakistan and have won the benefit of 3 percent that his competitor, India, has won.

In addition, Bangladesh and Vietnam, two large clothing suppliers of the American market, are confronted with steep mutual rates of 39 percent and 46 percent respectively. This means that Pakistan could still get a wider market share and be competitive in the US, even with its own 29 percent extra rate.

In addition, reports from a potential recession caused by the escalating trade war in the US and China suggest that Pakistan can arise as an unexpected beneficiary. Trump’s aggressive tariff increases on China – with threats of more – can drastically increase the price of Chinese clothing and clothing in the US

In particular, Chinese items of clothing are more expensive than Pakistan on the American market. With the latest tariff round and possible future increases, Pakistan products can become more attractive due to lower prices. This can lead to increased orders from American buyers, renewed demand for competitively priced Pakistani goods and an extensive market share in the US

The business sector in Pakistan has repeated sentiment that the tariff situation has unexpectedly Pakistan gave a window to strengthen trade tires with the United States. According to a report from the Karachi Chamber of Commerce and Industry (KCCI)Higher rates for Vietnam and Bangladesh have created Pakistan opportunities to increase its “market share in textiles, food products and plastics”.

Likewise, Zubair Motiwala, a textile manufacturer and former Chief Executive at the Trade Development Authority of Pakistan (TDAP) said That “Pakistan’s textile output will increase to the largest destination of the US after imposing Trump by imposing mutual rate on the import of majority economies around the world, including Pakistan.” “There is a good chance that Pakistan will receive new textile export assignments, because American buyers will lower their imports from those countries that have received higher Trump rates and distract their import orders to cheaper countries such as Pakistan,” he said.

Pakistan seems to recognize the need for a strategic approach to navigate through this situation and to take advantage of emerging opportunities. Finance Minister Muhammad Aurangzeb has announced that Pakistan will send a powerful delegation to the US to discuss mutual rates for Pakistani goods.

“You should never have a good crisis waste. We see it as a challenge and an opportunity,” he said reporters in Islamabad.

It seems that Pakistan and the US are investigating new opportunities to expand the trade cooperation under the Trump administration, with Critical minerals Potential on the rise as an important cooperation area. The American State Secretary Marco Rubio spoke on Monday with Pakistani Foreign Minister Ishaq Dar to discuss newly imposed ratesTrade relationships and prospects for involvement in critical minerals, said the Ministry of Foreign Affairs.

“She [Rubio and Dar] Discussed American mutual rates about Pakistan and how you can make progress in the direction of a fair and balanced trade relationship, “said the statement.

“The secretary has shown prospects for involvement in critical minerals and interested in expanding commercial opportunities for American companies [in Pakistan]. “

However, traders in Pakistan warn that in order to make full use of this opportunity, the government must help to help exporters. There are concerns that the heavy dependence on Pakistan from textile output means that the limited product range for the American market is susceptible to changing market dynamics. Textile is good 77 percent From the total export from Pakistan to the US, the government must support other sectors in exporting leather, surgical goods, cement and steel products.

Moreover, it is necessary to lower the operating costs for Pakistani companies by reducing energy costs and negotiating rates. In the midst of Trump’s rates, the Pakistani government has significantly reduced Energy costs for commercial users and promised to do more in the coming weeks. The move was welcomed by the business community that is looking for further actions from the government to help them prepare better for their negotiations with the American buyers.

With unexpected trade disruptions, Pakistan’s policymakers must focus on supporting exporters through improved trade relationships with the US and new incentives, including possible collaborations in critical minerals. In the coming weeks, Pakistan will benefit from his light tariff benefits compared to regional competitors.