Islamabad, Feb 5: According to AKD Securities Limited, Pakistan’s export-oriented sectors, particularly textiles, are expected to benefit from shifting global trade dynamics resulting from the ongoing trade wars and tariffs imposed on China by the USA. In its Pakistan Strategy Report 2025, the brokerage firm stated that these new trade barriers could redirect orders away from China to competitive markets like Pakistan, potentially boosting demand for energy and fostering growth in these sectors.
The report pointed out that the newly elected US President, Donald Trump, has imposed a 10% tariff on all Chinese imports, signaling the start of a new trade war. Trump has also hinted at targeting the European Union with similar tariffs, although no specific timeline has been disclosed.
However, AKD Securities also warned of potential negative impacts on Pakistan’s exports due to these tariffs. A possible widening of Pakistan’s trade deficit could result, putting pressure on the country’s currency stability as export revenues decline and foreign exchange reserves diminish.
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Furthermore, the report highlighted the risk that the US-led restrictions on China could disrupt the China-Pakistan Economic Corridor (CPEC). This could delay trade and infrastructure projects and strain the diplomatic and economic relations between Pakistan, China, and the USA.
Additionally, the report emphasized that non-compliance with International Monetary Fund (IMF) targets could lead to an early exit from the IMF program, halting vital financial inflows and further destabilizing Pakistan’s currency and foreign reserves.
While Pakistan stands to benefit from redirected trade, AKD Securities warned of significant risks tied to these geopolitical shifts, with implications for both trade and economic stability.
