US Sets Durable 10% Tariff on Pakistani Goods: Nishat Mills, Interloop Stocks in Focus

What the New US Tariff Changed for Pakistan's Exports

The United States has replaced a temporary 10 percent tariff on Pakistani goods with a new duty set at the same 10 percent rate, this time justified on forced labor grounds rather than the reciprocal trade dispute that started the fight last year. The US Trade Representative applied the same treatment to 60 trading partners, splitting them into a 10 percent group that includes Pakistan, India, Bangladesh and the UK, and a 12.5 percent group that includes China. The new tariff took effect the same day the earlier temporary rate expired, so Pakistani exporters see no change in the sticker cost of shipping to the US, but they lose the hope that the rate would fall further once the underlying legal dispute over Washington's earlier duties settled. Officials in Islamabad say bilateral trade talks earlier this month made progress toward a separate reciprocal agreement, so the door for a better long term rate is still open, just not through this particular ruling.

Why Nishat Mills and Interloop Stock Are in Focus

Pakistan's textile and apparel industry sends a large share of its output to the US, so Nishat Mills and Interloop sit closer to this story than almost any other listed company. Interloop built its business on hosiery and denim exports, much of it landing on US retail shelves, so a durable 10 percent tariff is now simply a fixed part of its cost structure rather than a temporary headwind that might disappear. Nishat Mills exports a broad mix of home textiles and apparel and carries the tariff cost across a wider base, which cushions the earnings hit but does not remove it.

Which Stocks, and Why

Gul Ahmed Textile ships home textiles and apparel to the US and faces the same fixed cost. Kohinoor Textile exports yarn and fabric with a smaller and more diversified customer base, so the tariff bites less here relative to the two more US concentrated names. None of these companies see their tariff rate change from what they were already paying under the temporary order, so the immediate earnings hit is not new. What changes is certainty: exporters can now price contracts and plan capacity around a tariff that looks likely to stay in place, rather than one that could have reverted to the earlier 19 percent rate or dropped to zero depending on how US courts and negotiators settled the underlying dispute.

What to Watch

The clearest signal will be Pakistan's monthly textile export data over the next two to three months, which will show whether buyers are shifting orders to countries facing lower tariffs or absorbing the cost to keep sourcing from Pakistan. A second signal is the outcome of the separate bilateral trade talks Islamabad has flagged as ongoing, since a negotiated deal could still lower the rate below 10 percent regardless of this forced labor ruling. Investors in Nishat Mills, Interloop, Gul Ahmed Textile and Kohinoor Textile should also watch how competing exporters such as India and Bangladesh, who face the same 10 percent rate, price their own contracts, since relative competitiveness among these countries matters as much as the absolute tariff level.