The USA, under the new Trump Administration, has unilaterally imposed tariffs on all imports into the country.

The first step, effective from 5th of April 2025, was the imposition of a “base line” tariff of 10%. Countries which now only face the base rate are the UK, Brazil, Australia, New Zealand, Türkiye, Colombia, Argentina, UAE and South Africa.

The second and much more drastic step is the levy of reciprocal tariffs on the ‘worst offenders’, with effect from the 9th of April 2025. These are countries which have large trade surpluses with the USA in relation to their imports from the USA.

Apparently, the tariff is equal to the trade surplus of the country exporting to the US as a percentage of imports by the country from the USA, divided by 2.

For example, Pakistan exports $5.4 billion of goods and imports approximately $3.4 billion of goods from the USA. Therefore, according to the above-mentioned formula the reciprocal tariff on Pakistani exports is 29%.

Other exporting countries or groups of countries will face accordingly reciprocal tariffs, depending on the size of the trade surplus with the USA. It has been set at 34% on imports from China, 45% on Vietnam, 36% on Thailand, 24% on Japan, 30% on South Africa, 32% on Taiwan and so on.

Among South Asian countries, Pakistan exporters will have to pay a tariff of 29%. This is in comparison to 26% in the case of India and 37% in the case of Bangladesh.

There is clearly a need to derive the implications of this tariff by the USA on Pakistan’s exports.

The USA........

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