Policy Briefing: Impact of Tariffs on the U.S.–Pakistan Trade Deal
- FAROOQ MUGHAL
- Aug 1
- 2 min read
Overview
The U.S.–Pakistan Tariff and Trade Deal, finalized in August 2025, marks a pivotal shift in bilateral economic relations. Under the agreement, tariffs on Pakistani exports to the United States were reduced from 29% to 19%, enhancing Pakistan’s competitiveness in key sectors such as textiles, leather goods, and surgical instruments. The deal also includes a strategic energy partnership, with U.S. firms expected to help develop Pakistan’s untapped oil reserves and facilitate crude oil imports. Framed as a “balanced and forward-looking” move by both governments, the agreement signals deeper cooperation in emerging sectors like artificial intelligence, cryptocurrency, and mineral development. While the tariff reduction offers immediate relief to exporters, regulatory hurdles and geopolitical sensitivities remain, making this deal both an opportunity and a challenge for stakeholders on both sides.
Tariff Adjustments & Sectoral Impact
Sector | Previous Tariff | Revised Tariff | Strategic Implication |
Textiles & Apparel | 29% | 19% | Boosts competitiveness in U.S. market |
Leather Goods | 29% | 19% | Eases pressure on export margins |
Surgical Instruments | 29% | 19% | Supports Pakistan’s medical device exports |
Crude Oil Imports | N/A | N/A | Pakistan to import 1M barrels of U.S. crude |
Strategic Dimensions
Energy Collaboration: The deal includes a joint initiative to explore Pakistan’s untapped oil reserves, with U.S. firms expected to lead development.
Investment Signals: The tariff reduction is seen as a precursor to increased U.S. investment in Pakistan’s energy, tech, and mineral sectors.
Regional Leverage: Trump’s remarks suggest potential for Pakistan to supply oil to India, hinting at broader regional integration.
Trade Snapshot
U.S.–Pakistan Trade Volume (2024): $7.3 billion
U.S. Goods Trade Deficit with Pakistan: $3 billion (↑5.2% from 2023)
Pakistan’s Exports to U.S. (FY 2024–25): $5.55 billion (↑11.06%)
Recommendations from Mughal Strategies
Activate Export Promotion: Encourage members to capitalize on reduced tariffs through aggressive U.S. market outreach.
Facilitate Sector Briefings: Host webinars or roundtables on energy, tech, and textile opportunities under the new deal.
Monitor Regulatory Shifts: Stay alert to evolving U.S. trade policies, especially under the broader “Liberation Day” tariff framework.
Engage in Bilateral Forums: Advocate for chamber representation in future U.S.–Pakistan trade dialogues.
Mughal Strategies Global Partners, LLC
Mughal Strategies and Global Partners, LLC is the only government advisory firm in the United States with a dedicated U.S.–Pakistan Practice.
Anchored by Farooq Mughal’s historic legislative leadership and cross-sector diplomacy, the firm bridges trade, technology, and cultural engagement between the two nations. From decoding tariff frameworks and facilitating joint ventures to visualizing heritage-rich outreach, Mughal Strategies offers unparalleled insight and access across public and private sectors. With deep ties to diaspora-led chambers, state capitols, and diplomatic corridors, the firm transforms bilateral vision into civic impact and commercial success.
The firm helps Pakistani exporters and U.S.-based diaspora ventures decode tariff shifts, align with American market standards, and build strategic partnerships across sectors like textiles, energy, and technology. Leveraging Farooq Mughal’s legislative leadership and the Sindh–Georgia twin city resolution, the firm fosters trust, visibility, and access to key decision-makers.
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