Pakistan has launched diplomatic talks with the United States to address the impact of reciprocal tariffs announced by President Donald Trump. The discussions are being led by the Ministry of Commerce. A delegation headed by the Commerce Secretary plans to visit Washington to negotiate a trade deal that benefits both nations. These talks come after the President paused the implementation of new tariffs for 90 days, providing a chance for renegotiation.
Moreover, the topic of reciprocal tariffs was addressed during discussions with a visiting US Congressional delegation. The Ministry of Foreign Affairs is keeping active communication with Washington regarding this matter. In collaboration with industry stakeholders, the government is assessing the tariffs’ impact, noting Pakistan’s exposure is less severe than that of countries like Turkey.
Experts from the Pakistan Institute of Development Economics (PIDE) warned that the proposed 29% reciprocal tariff, combined with an existing 8.6% tariff, could raise the total duty to 37.6%. This increase could reduce exports to the US by 20-25%, resulting in annual losses ranging from $1.1 billion to $1.4 billion. The textile sector, facing high tariffs, is particularly vulnerable.
Despite these challenges, trade between Pakistan and the US remains robust. Bilateral trade reached $5.54 billion in the first nine months of FY 2024-25, a 15% increase from last year. Pakistan’s exports to the US grew by 12%, while imports rose by 28%. This growth has led to a trade surplus of $3.15 billion, demonstrating the strength of their economic relationship.
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