In its 2025 Pakistan Strategy Report, AKD Securities Limited highlighted how the ongoing US-China trade war is likely to redirect global export orders to more competitive markets like Pakistan. The report emphasized that Pakistan’s textile and export-oriented sectors would be crucial in driving the nation’s energy demand, as more orders are expected to flow to Pakistan due to the trade restrictions imposed on China by both the United States and Europe.
US President Donald Trump’s decision to impose a 10 percent tariff on all Chinese imports has sparked widespread concerns, with economists labeling it as the beginning of a new trade war. Trump has also mentioned that the European Union could be his next target for higher tariffs, though no specific timeline for such actions has been provided yet.
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However, AKD Securities warned that these trade measures could have negative consequences for Pakistan’s economy. Restrictions on Chinese exports may lead to a reduction in Pakistan’s own exports, which could result in a widening trade deficit. This would likely put pressure on Pakistan’s currency stability, with declining export revenues and strained foreign exchange reserves.
Additionally, the brokerage house noted that US-led restrictions on China could disrupt the China-Pakistan Economic Corridor (CPEC). This could impact ongoing trade and infrastructure projects and complicate diplomatic and economic relations between Pakistan, China, and the US. Furthermore, the report stated that failure to meet IMF targets might result in an early exit from the IMF program, cutting off crucial financial inflows, destabilizing the currency, and increasing pressure on foreign reserves.
