The ongoing trade tensions between the United States and China, coupled with tariffs imposed by the U.S. and Europe, are expected to redirect export orders to competitive markets like Pakistan, according to AKD Securities Limited. In its Pakistan Strategy Report 2025, the brokerage firm highlighted the potential for Pakistan’s textile and export-oriented sectors to play a key role in driving energy demand as global trade dynamics shift.
The report noted that the U.S. has imposed a 10% tariff on all Chinese imports under the administration of President Donald Trump, a move widely regarded as the start of a new trade war. Trump has also indicated plans to target the European Union with higher tariffs, though no specific timeline has been announced.
AKD Securities stated that the redirection of export orders from China could benefit Pakistan’s export sectors, particularly textiles. However, it also warned of potential risks. The report stated that U.S.-led restrictions on China could pose challenges for the China-Pakistan Economic Corridor (CPEC), potentially disrupting trade and infrastructure projects while complicating diplomatic and economic relations between the involved nations.
Additionally, the brokerage firm cautioned that the U.S. administration’s trade policies could negatively impact Pakistan’s exports, widening the trade deficit and putting pressure on currency stability. A decline in export revenues could strain foreign exchange reserves, further destabilizing the economy.
The report also raised concerns about Pakistan’s compliance with International Monetary Fund (IMF) targets. Failure to meet these targets could result in an early exit from the IMF program, halting financial inflows and exacerbating pressure on the country’s foreign reserves and currency stability.
As global trade tensions escalate, Pakistan faces both opportunities and challenges. While the country’s export sectors may benefit from redirected orders, the broader economic implications of trade wars and geopolitical shifts remain uncertain.
