Pakistan to Benefit from Redirected Export Orders Amid US-China Trade War: AKD Securities
According to AKD Securities Limited, Pakistan’s textile and export-oriented sectors are expected to benefit from the ongoing trade wars and tariffs imposed on China by the United States and Europe. The brokerage house outlined in its Pakistan Strategy Report 2025 that the tariffs are likely to redirect export orders to more competitive markets like Pakistan, which could drive energy demand and bolster the country’s industrial sector.
US-China Trade War and its Impact on Pakistan
The new US President Donald Trump has imposed a 10 percent tariff on all Chinese imports, marking the beginning of a new trade war, according to economists. Trump also hinted at imposing higher tariffs on the European Union in the near future, although no specific timeline has been set for this action.
This shift in trade dynamics could present an opportunity for Pakistan, as export orders traditionally directed toward China may be redirected towards countries with lower production costs, such as Pakistan. The textile industry, a major contributor to Pakistan’s exports, is expected to play a pivotal role in this growth.
Potential Risks and Challenges for Pakistan’s Economy
However, AKD Securities also raised concerns about the potential negative impact on Pakistan’s exports due to the newly imposed US restrictions and tariffs. These developments could lead to a widening trade deficit, exert pressure on currency stability, and put strain on foreign exchange reserves.
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Moreover, the brokerage house warned that US-led restrictions on China could disrupt the ongoing China-Pakistan Economic Corridor (CPEC) projects, complicating trade and infrastructure development initiatives. This, in turn, may affect the diplomatic and economic relations between China and Pakistan.
IMF Program Compliance and Financial Stability
Non-compliance with IMF targets could further exacerbate these economic challenges, possibly leading to an early exit from the IMF program. Such an exit may halt vital financial inflows, destabilize Pakistan’s currency, and put additional pressure on foreign reserves.
In summary, while Pakistan stands to gain from the shift in global trade patterns due to the US-China trade war, the country must also prepare for potential challenges stemming from these developments.
