LAHORE: Pakistan will now face a 19% tariff on its exports to the United States, according to an executive order issued by former U.S. President Donald Trump, as his imposed tariff deadline took effect on August 1. The new rate, reduced from a previous 29%, was announced a day after the U.S. and Pakistan concluded a trade agreement in Washington. The agreement also included a separate deal on the joint development of Pakistan’s oil reserves.
Trump announced the oil deal through a post on his platform, Truth Social, stating, “We have just concluded a deal with the country of Pakistan, whereby Pakistan and the United States will work together on developing their massive oil reserves.” Pakistan’s Finance Minister Muhammad Aurangzeb, who led the trade talks, called the agreement a “real win-win deal,” explaining that it helped protect Pakistani exports from even steeper tariffs.
Under the revised U.S. tariff regime, Pakistan secured a more favorable rate compared to several regional countries. India will face a 25% duty, Bangladesh and Vietnam 20%, Iraq 35%, and Indonesia also 19%. Trump had warned dozens of countries earlier this year to finalize trade agreements or face tariffs significantly above the standard 10% rate.
The executive order outlined new import duties ranging from 10% to 41% for 69 countries, effective within seven days. Some nations were given exemptions for goods already shipped, while others did not have the opportunity to negotiate. Products from countries not listed will automatically face a 10% import tax, which Trump warned could rise further.
Trump’s administration indicated that additional trade deals were in the pipeline, claiming the goal was to reduce trade deficits and support U.S. manufacturing. Despite earlier market volatility when these measures were first introduced in April, the latest developments caused only mild market fluctuations in Asia.
In the order, Trump stated that certain countries had failed to address trade imbalances or align with the U.S. on economic and security matters, despite being part of ongoing negotiations. He also mentioned that more details, such as rules of origin for specific goods, would be released soon, potentially affecting tariff levels further.
The new tariffs also targeted other countries. Canada, for instance, saw tariffs on certain goods rise from 25% to 35%, especially those linked to fentanyl-related concerns. Trump accused Canada of not doing enough to stop the flow of illegal narcotics into the U.S. Meanwhile, Mexico received a temporary 90-day extension from a planned 30% tariff hike, following a phone call between Trump and Mexican President Claudia Sheinbaum.
India, on the other hand, faced a 25% tariff due to stalled negotiations over agricultural market access and its continued oil trade with Russia. The Indian government insisted on protecting its farming sector, sparking political backlash and a dip in the Indian rupee after the tariff hike was confirmed.
Trump’s latest trade move comes amid rising consumer prices in the U.S., a consequence some economists attribute to increased import duties. Nevertheless, Trump claimed the newly announced deals were positive for the American economy, though many details remain to be made public.
