A quiet realignment is reshaping Pakistan's trade with North America. While exports to the region inched up just 1.32 percent to $6.503 billion in FY26, imports jumped 6.52 percent to $3.822 billion — a gap driven almost entirely by a surge in purchases from the United States. Main Developments Imports from the US ballooned 38.93 percent to $3.265 billion in FY26, up from $2.350 billion the prior year. This sharp climb reflects a new bilateral understanding under which Pakistan agreed to buy additional oil and other commodities from Washington to narrow the trade deficit. Exports to the US, by contrast, grew a modest 1.55 percent to $6.125 billion in FY26 from $6.031 billion a year earlier. The contrast is stark: import growth outpaced export growth by a factor of roughly 25. Read also: Turkey and Iraq Extend Oil Pipeline Deal by One Year Within the broader region, performance was mixed. Exports to Canada contracted 2.30 percent to $377.455 million, while shipments to Latin America fell 8.32 percent to $66.98 million. Central American exports dipped 2.11 percent to $165.86 million, with Mexico — the main destination there — down 6.25 percent to $122.03 million. Background The US remains Pakistan's dominant North American market, absorbing nearly 94 percent of the region's total exports. In FY25, exports to North America had grown a robust 9.97 percent to $6.415 billion, powered largely by textile and clothing shipments. That momentum has since stalled. US-bound exports rose 10.72 percent in FY25 to $6.028 billion, but FY26 growth slowed dramatically. The policy backdrop includes President Donald Trump's additional tariffs, with Pakistan receiving limited relief under a reciprocal arrangement tied to increased US imports. State Bank of Pakistan data also shows resilience elsewhere in the hemisphere. Exports to South America — including Argentina, Brazil, and Uruguay — climbed 15 percent to $402.39 million in FY26. Why It Matters The widening gap signals a deliberate policy trade-off: Pakistan is absorbing more US goods to preserve preferential access for its own exports. For Pakistani manufacturers, particularly in textiles, maintaining that access is critical to the sector's competitiveness. Yet the imbalance carries costs. A 39 percent surge in imports without corresponding export growth could pressure the current account, even as oil purchases from the US help address energy needs. The arrangement also leaves Pakistan exposed to shifts in US trade policy, as the tariff landscape remains fluid. What's Next Observers will watch whether Pakistan's export growth can recover in FY27, particularly as the new import commitments take fuller effect. The trajectory of US tariffs under the reciprocal arrangement remains an open question, as does whether South American markets can offset softness in Canada and Latin America. Data for the early months of FY27 will indicate whether the trade balance stabilizes or continues to widen.