Last month, president of the United States, Donald Trump, criticized Pakistan for providing “safe havens” to terrorist organizations. The comments from the President reportedly sparked diplomatic tensions between the two countries which can lead to a possible economic fallout if the situation remains unattended.
The business community, for now, does not fear any immediate ramifications of the sour diplomatic relations but the US companies in Pakistan believe that it might hurt Pakistan’s economy in the long run and the country may get denied of any more lending by the International Monetary Fund (IMF).
For now, there has been no impact on the trade amongst the two countries, according to Chairman of Pakistan Chamber of Commerce and Industry, Zubair Tufail. President of Employees Federation of Pakistan, Majyd Aziz believes that the government cannot do everything on its own and will need the support of the private sector in order to continue trade activities in the United States.
No sanctions have so far been imposed by the United States on Pakistan, but if any such sanctions are imposed in the future, there will be a negative impact on trade in future. According to the data collected by American Business Council, investment done by the US companies in Pakistan totals around $750 million while revenue earned yearly from these investments is $4 billion.
Special assistant to the Prime Minister of Economic Affairs, Miftah Ismail, was confident that the situation between the two countries would improve in the future, which will improve the trading environment in both the US and Pakistan. He said that working together is beneficial for both the countries as top US companies are operating successfully and profitably in Pakistan.
Pakistan itself is the 57th largest trading partner of the United States with two-way trade of $5.5 billion in 2016. Exports to the US in the previous year stood at $3.4 billion while imports were $2.1 billion during 2016.