Pakistan’s e-commerce sector has experienced unprecedented growth in recent years. In 2024, the market is estimated to be worth over PKR 200 billion (approximately $710 million), driven by increased internet and mobile broadband penetration. Platforms like Daraz, PriceOye, and rising players like DealCart are transforming how Pakistanis shop. But what’s even more impressive is the number of young entrepreneurs breaking into global e-commerce through platforms like Amazon, Shopify, and Etsy.
The United States remains Pakistan’s largest export destination, with annual exports reaching nearly $6 billion, or around 18% of Pakistan’s total exports in 2024. For e-commerce sellers, the U.S. market is particularly attractive due to its high purchasing power, deep digital integration, and appetite for low-cost imported goods.
With recent Trump Tariffs 2.0, goods originating from Pakistan will now face a 29% tariff. While the immediate fallout is already being felt across Pakistan’s export sector—particularly textiles—the country’s nascent but rapidly growing e-commerce industry also finds itself staring down a complex set of new challenges.
Pakistan was already reeling from Trump’s 29% tariffs on Pakistani goods; a staggering 104% tariff on Chinese products is an even bigger blow, which directly threatens Pakistan’s growing dropshipping industry.
Dropshipping is one of the fastest-growing business models among Pakistani e-commerce entrepreneurs, especially shipping goods from Chinese manufacturers directly to U.S. customers. This model allowed Pakistani sellers to avoid inventory costs and logistical burdens. However, with Trump’s tariff hikes, all this is changing!
Recent Trump Tariffs on Chinese Products
On U.S. Liberation Day 2025, President Donald Trump announced a sweeping tariff policy overhaul. A universal 10% baseline tariff now applies to all imports, but Chinese goods were hit the hardest. Tariffs on Chinese imports surged from a previous 20% to a whopping 104%, a decision that experts warn could reshape global trade dynamics. Additionally, the “de minimis” exemption — which previously allowed duty-free imports of goods valued below $800—has been revoked for Chinese products. Most Pakistani dropshippers rely on Chinese suppliers due to their low costs and robust logistics via platforms like AliExpress and CJ Dropshipping. Now, all Chinese shipments to the U.S., regardless of value, face the full tariff burden.
What Does a 104% Tariff Actually Mean for Dropshipping?
To understand the impact, let’s break it down with an example:
If a dropshipper sells a Chinese-manufactured gadget for $10, the new tariffs mean they would pay $10.40 in import taxes alone (104% of the item’s cost). Add to that the newly introduced 10% universal import tax, which is another $1.04; the total cost of importing that $10 item rises to $21.44 — more than double the original price, excluding shipping and logistics.
The new tariff regime threatens to upend the very foundation of Pakistan’s thriving dropshipping industry. Since most products are shipped directly from Chinese warehouses to U.S. customers, the 104% tariff will drastically increase costs, erode margins, and reduce competitiveness. Importing items to Pakistan first and then shipping to the U.S. isn’t a viable option either, as it would add further costs, longer shipping times, and complexities around customs and warehousing.
For many Pakistani entrepreneurs, this creates a double bind: sourcing from China is now cost-prohibitive, but shifting to other markets requires new supplier relationships, often at higher prices.
Strategies to Mitigate the Impact
Pakistani e-commerce players need to explore other ways to adapt:
- Increase Pricing Strategically: Slight price increases may be accepted by U.S. consumers if communicated transparently.
- Prioritize High-Margin Products: Focus on products where profit margins can absorb increased duties.
- Diversify Supply Chains: Sourcing from Vietnam, India, Turkey, or even Latin American countries can reduce dependency on China.
- Explore Alternate Markets: The EU, UK, and Middle Eastern markets are relatively untapped and less exposed to U.S.-China trade tensions. EU GSP Plus status can especially be leveraged in this situation.
- Domestic Warehousing in the U.S.: Partnering with fulfilment centres in the U.S. can help overcome some of the shipping-related hurdles.
What the Future Holds?
The aggressive tariff policy could mark a turning point for global e-commerce. While Trump’s goal may be to weaken China’s export dominance, the ripple effects are being felt in developing countries like Pakistan, which rely on Chinese supply chains. If these policies persist, we may see a slowdown in cross-border Pakistani e-commerce, a drop in self-employment opportunities, and increased costs passed on to U.S. consumers.
By rethinking supply chain strategies and targeting new markets, there’s still potential to weather the storm. Yet, immediate action is required to counter the impact of Trump tariffs, both at the entrepreneurial and policy levels, to protect one of Pakistan’s most promising digital success stories.