US Tariffs Hit Pakistan Exports: Textile Stocks in Focus

The United States said on Thursday it would impose new tariffs on 60 trading partners, including Pakistan, India, China and the European Union, citing forced labour concerns under a Section 301 review. The levies took effect Friday and range from 10 percent to 12.5 percent. Crucially, they replace an across-the-board duty that President Trump had rolled out earlier this year and that was due to expire, so Pakistani goods landing in the US keep facing a double-digit tariff, just under a different legal justification than before.

What the New US Tariffs Changed for Pakistan

Pakistan was one of 60 economies named in the new US tariff action, alongside major exporters such as India and China. The rates, 10 to 12.5 percent depending on the country, are pitched as a response to forced labour risk rather than the reciprocal-tariff logic used earlier in the year, but the practical effect for exporters is continuity: a meaningful duty on Pakistani goods sold into the US stays in place, with no expiry date attached to the old order to hope for. That removes a source of near-term relief that exporters and their US buyers may have been pricing in.

Why Textile Stocks Are in Focus

The United States is one of the largest single destinations for Pakistan's textile and apparel exports, spanning home textiles, hosiery and knitwear sold to US retailers and brands. A tariff in this range raises the landed cost that US buyers pay for Pakistani-made goods. That cost either gets passed on in price, which risks order volumes as buyers compare against lower-tariff competitors such as Bangladesh or Vietnam, or it gets absorbed by exporters through thinner margins. Because the new levy replaces an existing duty rather than adding to it, the immediate shock is smaller than a fresh tariff would be. What changes is the certainty: exporters now know the higher cost base is durable rather than a temporary Trump-era measure nearing its end.

Which stocks, and why

Interloop, the country's largest hosiery and denim exporter, ships a significant share of its output to US apparel brands and retailers, so a sustained tariff makes its products less price-competitive against rivals based in countries facing lower duties. Nishat Mills, whose home textiles and garments reach both US and European retail chains, faces a similar squeeze on order economics for its US-bound volumes. Gul Ahmed Textile, a major home-textile supplier to US retailers, carries the same exposure since its bedding and apparel shipments to the US now sit behind a tariff that was not guaranteed to continue in this form. None of the three faces a sudden earnings shock, since the tariff replaces rather than stacks on an existing one, but the durability of the higher rate works against their US order books over coming quarters rather than easing off as some may have expected.

What to watch

The clearest signal will come from each company's export data and management commentary on US order books alongside their next quarterly results. Watch also for any Pakistani government response, since Islamabad has been pushing for closer US economic ties and could seek an exemption or a negotiated reduction for Pakistan specifically. A carve-out would ease the pressure on these exporters, while an extension of the tariff to more product categories would deepen it.