Trump hits Pakistan with 29% tariff under new trade plan

April 03, 2025 (MLN): The United States has significantly raised tariffs on Pakistani exports, increasing rates from 4-5% to 29% under its reciprocal trade policy.

President Donald Trump announced the move as part of a broader strategy to address trade imbalances with multiple countries.

Under the new policy, Pakistan will now face a 29% tariff, mirroring its 58% tariff on US goods, as cited by the administration.

The baseline 10% tariff will take effect on April 5, 2025, with additional rates applied to countries imposing higher trade barriers on American exports.

China faces the steepest tariff at 67%, followed by Vietnam (90%), Thailand (72%), South Africa (60%), and Malaysia (47%).

The European Union will see a 39% tariff, while Japan, South Korea, and India also face significant increases. In contrast, Canada and Mexico remain exempt under existing trade frameworks.

Additionally, the US will impose a 25% tariff on all foreign-made automobiles, a move expected to reshape the global automotive industry.

The policy aims to address trade imbalances, targeting countries with "unfair" tariffs and non-tariff barriers restricting US exports.

The tariff escalation has sent shockwaves through global markets. Oxford Economics warned that tariff rates are reaching levels unseen since the 1930s, surpassing previous economic forecasts.

US stock futures dropped, with S&P 500 E-minis falling 3.5%, while safe-haven assets like gold and US Treasuries gained.

European Commission President Ursula von der Leyen called the tariffs a "major blow to the world economy," warning of increased protectionism and uncertainty.

South Korea’s acting President Han Duck-soo has directed officials to draft emergency support measures for affected businesses.

With trade tensions rising, countries may seek renegotiations or challenge the tariffs through international trade bodies, as global markets brace for the economic impact of Trump's latest move.

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