LAHORE: The Pakistan government is reassessing its trade engagement with Iran after the United States announced that it may impose an additional 25% tariff on countries that conduct business with Tehran.
The Commerce Ministry convened an inter-ministerial meeting on February 10, 2026, to examine the implications of a recent US executive order and develop a coordinated response. In correspondence with ministries, the ministry cited a communication from the Ministry of Foreign Affairs referring to a February 6, 2026 executive order by the US president.
The order states that an additional ad valorem duty, such as 25%, may be applied to goods imported into the United States from any country that directly or indirectly purchases or imports Iranian products.
Pakistan’s formal trade with Iran remains limited due to longstanding US sanctions and the absence of banking channels. Most trade occurs through barter or informal arrangements, while Iranian transport services are used for exports to Central Asian states.
The United States is Pakistan’s largest single-country export market, accounting for 18% of total exports, or about $5.8 billion, in FY2024-25, according to Federal Board of Revenue data. Textiles and garments make up around 82% of exports to the US.
The US is also the leading destination for Pakistan’s IT and IT-enabled services, with exports of about $2.2 billion in FY2024-25, representing 58% of total IT and ITeS exports of $3.8 billion. Pakistani firms also sell through online platforms including Amazon.
Officials noted that the US had already imposed a 19% reciprocal tariff on Pakistan on July 31, 2025. Despite this, exports to the US have remained stable and are showing an upward trend.
Participants in the February 10 meeting discussed the potential impact of any additional tariff linked to trade with Iran. Officials indicated that given Pakistan’s dependence on the US market, particularly in textiles and IT services, the government is considering a cautious approach to avoid affecting export access.
