It was never a question of if but when. On Thursday, US President Donald Trump intensified the ongoing global trade war with yet another announcement imposing a 29% tariff on Pakistani exports, citing Pakistan’s 58% tariff on American goods. But while dozens of other countries on the Trump list might be ready for this new skirmish, Pakistan cannot afford to sleep through yet another alarm.
For decades, Pakistan has relied on a narrow and fragile export base, with textiles dominating the trade portfolio. In 2023, textiles made up nearly 79% of Pakistan’s exports to the U.S., a level of dependency that should have raised alarms long ago. Now, the price of inaction is coming due. The tariff threatens to cripple a sector that employs millions, disrupt supply chains, and worsen an already precarious economic situation.
But to blame Washington alone would be missing the point. Pakistan’s crisis was homegrown long before the tariffs hit.
This is not Pakistan’s first economic crisis, and it won’t be its last-unless its leaders rethink their strategy. Having spent years in a cycle of bailouts, emergency fixes, and half-hearted reforms, Pakistan keeps avoiding the hard but necessary steps toward fundamental economic transformation.
Take energy costs: a crucial factor in manufacturing. A Pakistani textile factory pays 17.5 cents per kilowatt-hour for electricity, while its competitors in Vietnam, Bangladesh, and India pay nearly half that. The result? Even before this tariff, Pakistan was losing its global market share to more cost-efficient economies. Pakistan is not the only developing country trying to carve out a place in the global economy. Others-Vietnam, Turkey, and Mexico-have already pivoted toward higher-value industries, investing in technology, electronics, and specialized manufacturing.
Instead of preparing for the inevitable shifts in trade policies, Pakistan remained reliant on outdated economic models, betting on traditional exports and short-term relief measures.
To state the obvious, there are two ways forward: Pakistan can keep playing defence, lobbying for tariff exemptions and emergency trade deals, hoping to patch the immediate damage. Or, it can take this moment as the turning point it so desperately needs. May it be diversifying exports into IT services, agriculture technology and high-value manufacturing; slashing energy costs or leveraging trade diplomacy smartly, we need ideas that can deliver in a modern, competitive economy. *