Pakistan Bonds Fall After New US Tariffs

Pakistan’s international sovereign bonds weakened on Friday after US President Donald Trump unveiled a new round of tariffs on imports from 60 trading partners, sparking a wider sell-off across emerging market debt.

According to reports, Pakistan’s 2036 sovereign bond declined by 0.5%, with its bid price falling to 97.80 cents on the dollar.

Indonesia’s 2045 sovereign bond also dropped 0.5% to 88.48 cents, while Sri Lanka’s 2033 bond lost more than one cent, trading at 93.05 cents on the dollar.

The White House announced tariffs of 10% and 12.5% on imports from 60 countries, stating that the affected nations had not adequately enforced bans on goods produced through forced labour. The announcement came as a temporary global tariff of 10% was approaching its expiry.

Countries facing the new 10% tariff include Pakistan, Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Sri Lanka, and Trinidad and Tobago.

Meanwhile, the European Union, Taiwan, Japan, South Korea, and Switzerland received tariff rates which, when combined with existing most-favoured-nation duties, result in overall tariffs of either 10% or 12.5%.

The tariffs were introduced through a Federal Register notice issued on Thursday and cover products representing 99.4% of US imports. However, several categories, including oil and gas, fertilisers, and selected food products, have been exempted.

The latest tariff package represents the White House’s renewed effort to fulfil President Donald Trump’s campaign promise of imposing broad-based import tariffs. It follows a February decision by the US Supreme Court, which invalidated the administration’s previous reciprocal tariffs ranging from 10% to 50% that had been imposed under emergency powers to reduce the US trade deficit.

Sri Lanka is expected to be among the hardest-hit countries, as the United States remains its largest export destination, importing goods worth nearly $3 billion annually, mainly apparel products.