US Election 2024: Pakistan’s stakes and strategic hopes

As millions of Americans head to the polls, voting is in full swing for the 2024 Election, one of the most closely contested and expensive presidential races in the recent US history. With polls indicating a nearly even split among voters, there is a strong likelihood of delays in the final results, potentially including recounts if margins are too narrow, especially in key swing states- Pennsylvania, Georgia and Michigan.

In their final rallies, Kamla Harris in Philadelphia and Donald Trump in Michigan, each candidate reaffirmed their platform. Harris emphasised the Democratic Party’s commitment to maintaining the US role as a global power despite rising challenges, providing tax relief for working families and placing restrictions on excessive grocery pricing, preventing the abortion ban from becoming federal law and implementing immigration reforms to encourage legal immigration.

Trump reiterated his protectionist ‘America First’ agenda, pledging to reduce material support for global conflicts like the Ukraine war, raise tariffs on imports, offer additional tax cuts for domestic investors, leave abortion ban decisions to the states, deport illegal immigrants and deploy military to man porous borders to check border crossing.

According to data analytics firm AdImpact, the leading candidates have spent over $2.6 billion on their campaigns since March 2024 to influence voter preferences. Total spending for 2023-24 election cycle across broadcast, cable, radio, satellite, digital and CTV has reached $10.2bn, marking 13 per cent increase over the previous record of $9bn political expenditure in the 2019-20 election cycle.

US strategists do not rule out the possibility of a post-election divided government, where the executive branch, White House, and the legislative branch, Congress, are controlled by the different parties.

Like much of the world, Pakistan is closely watching US elections, evaluating the potential impact on bilateral ties. Pakistan’s relationship with the US is marked by a unique mix of political skepticism and cultural affinity. Decades of close ties in 1980s and 2000s have left a complex legacy, and while anti-American sentiment is politically resonant, the US remains a top choice of Pakistani youth pursuing higher education and for families seeking residency abroad.

The US is a key trade partner of Pakistan, with deep economic ties and the presence of numerous American companies across various sectors. In the FY2024, Pakistan’s trade with the US saw substantial growth, with exports reaching nearly $8 billion, driven largely by textiles and garments, boosting precious export revenues. While detailed data on imports is inaccessible currently, they are typically lower than exports and include machinery, electronics, and agricultural goods, underscoring Pakistan’s reliance on American technology and equipment for critical industries. Additionally, as a developing nation, Pakistan depends on multilateral development partners the IMF and the World Bank, where the US holds considerable influence. The US also hosts a large immigrant population, with over 625,000 Pakistani-Americans, contributing roughly one-third of Pakistan’s annual remittances.

Foreign relation experts and former diplomats expressed confidence that, regardless of the US election outcome, aligned mutual interests will likely keep US-Pakistan relations strong and on a positive path. Some, however, voiced concerns about potential interference in Pakistan’s internal affairs under a Trump administration. Pakistan’s West-oriented business community aspires to deepen future partnerships with the US but is wary of potential tariff hikes on imports should Trump take office. Economists emphasised that a country’s economic strength ultimately defines the terms of its bilateral and multilateral engagements.

Several business groups in Pakistan’s textile sector fear that adverse changes to US tariffs after the elections could impact their expanding exports. Stakeholders in the rapidly growing technology sector are similarly concerned, given their close ties to US companies and reliance on technology transfer. Privately they expressed unease about possible policy shifts but were reluctant to comment publicly.

Abdul Aleem, Secretary general, Overseas Investor’s Chamber of Commerce and Industry (OICCI), expressed regret over the modest flow of foreign direct investment (FDI) from the US in recent years, but linked potential FDI growth to a stable economic environment in Pakistan. He suggested that a Democratic administration in the US might continue to support Pakistan’s climate initiatives, regional stability, and multilateral aid, which could foster fiscal stability. In contrast, he anticipated that a Republican leadership might prioritize bilateral trade over development aid, with a stronger focus on transparency and regulatory reforms.

“Diversifying FDI beyond China and traditional sectors is crucial for Pakistan. A pro-trade stance from the US could open new avenues for diverse investments, especially if Pakistan aligns with global trends, attracting steady interest in areas like technology and clean energy”, he stated.

He anticipates a Harris administration would be more favorable for Pakistani diaspora and Pakistanis seeking to study or work in the US.

Jalil Abbas Jilani, former Pakistani Ambassador to the US, expressed confidence that positive momentum in the bilateral relations would continue post-election due to bipartisan recognition of Pakistan’s strategic importance in South Asia. Former foreign secretary Salman Bashir, however, noted diminished US focus on Pakistan since the US withdrawal from Afghanistan. He cautioned that a Trump administration might pressure Pakistan on issues like normalization with India and accommodating US concerns in relations with Iran, Afghanistan and China. Bashir added, “With Kamala, relations would remain steady, though a more dynamic relationship could emerge if Pakistan achieves economic stability and greater regional influence”.