The United States has voiced fresh concerns over Pakistan’s trade and investment environment, pointing to policies that it says are putting American businesses at a disadvantage. These concerns come on the heels of a significant move by the US administration, which slapped a 29 per cent reciprocal tariff on Pakistani goods.
According to the 2025 National Trade Estimate Report on Foreign Trade Barriers, American companies operating in Pakistan have long struggled with steep tariffs, unpredictable customs processes, and excessive red tape.
The report notes that US exporters are facing issues such as inconsistent customs valuation practices, outdated invoicing regulations, and demands for excessive documentation — all of which increase the cost and complexity of doing business in the country.
Specifically, the report highlights Customs Rules 389 and 391 as major stumbling blocks. Rule 389 mandates that a physical invoice and packing list be placed inside every shipping container. Rule 391 shifts the responsibility for including these documents — and any penalties for failing to do so — onto the goods’ owner and the shipping carrier.
“These requirements create serious compliance challenges, particularly for companies using third-party logistics, re-invoicing arrangements, or warehousing goods at different points during transit,” the report notes.
American firms have also raised concerns about foreign exchange restrictions and delays in repatriating profits, often attributing the hurdles to Pakistan’s efforts to conserve its dollar reserves. While there was some relief in 2024 due to a more stable balance of payments, the broader challenges persist.
Another recurring concern is the pressure from Pakistan’s Federal Board of Revenue (FBR), with US companies saying they’re being asked to prepay tax liabilities. At the same time, they claim that many local competitors either underreport income or evade taxes altogether.
“The US government has repeatedly taken up the issue of uneven and excessive taxation with the Pakistani authorities,” the report says, calling for an expanded and fairer tax net in the country.
On the intellectual property front, Pakistan remains on the US Special 301 Watch List. The report criticises weak enforcement of IP laws, a growing market for counterfeit goods, and inconsistent verdicts from IP tribunals.
“Although some progress has been made in updating laws and coordinating enforcement efforts, serious gaps remain — particularly in enforcement,” the report notes.
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