That exports to the USA were flat in December may well show that the Tariffs imposed across the board have not favoured Pakistan as much as it was thought they would, though it is also possible that if the advantage had not existed there would have been an even more precipitate fall. It should be remembered that the USA is one of those comparatively few countries with which Pakistan runs a surplus, but that is going to be reduced not just by the fall in exports, but the increase in imports because of the purchase of US crude oil. The problem seems to be depressed demand in the USA.
Pakistan’s exports to the USA were $447 million in December, which is marginally lower than $449 million the year before. This is not just the USA, but to the UK, European Union countries, and China, which reflects a global downturn. If demand had been strong, even if market share went down, exports would have increased, but with declining demand, even an increase in market share would not guarantee higher exports. As seems apparent from other markets as well, demand must be soft; because only the USA has fiddled with tariffs. The USA is undergoing a trade readjustment, for the dollar is declining against major currencies. Pakistan needs to review whether it may not end up with a deficit it cannot afford economically, especially after Pakistani firm Cnergyico has agreed to import three million more tons of crude from the USA till March, after having already imported a million tons, in a $430 million deal. True, that means a diversification of energy resources. Most oil so far has come from the Persian Gulf, through the Straits of Hormuz, an increasingly volatile area. However, a fallback position should not require the country to go into deficit.
The problem with the USA seems to be that the surplus will simply not go away. One shipment of rare-earth ores has already been dispatched. The Australian government has also expressed an interest in getting involved in the sector. Whoever is involved, the bottom line will be exports from Pakistan, with the USA running up a larger deficit. The news is not good from other markets, for the EU-India deal should not impinge on Pakistan, but India will make sure it does. The past shows that India has tried to do down Pakistan, and it will use its new clout with the EU to harm Pakistan somehow.
