Announcing the successful conclusion of tariff-related discussions with the United States, a statement released by the Finance Ministry on Friday stated that a tariff of 19% will be applicable for Pakistani exports to the US market.
The finance ministry noted that this decision reflects a balanced and forward-looking approach by the US authorities, keeping Pakistan competitive relative to other South and Southeast Asian countries.
In particular, this tariff level is expected to support Pakistan’s export potential, especially in key sectors such as textiles, which remain the backbone of the country’s export economy.
In what officials are calling a breakthrough moment for Pakistan’s economy and diplomacy, the United States and Pakistan have finalized a major trade agreement — a move that signals renewed trust, deeper economic cooperation, and closer strategic ties between the two countries.
The deal was confirmed by US President Donald Trump, who described Pakistan’s oil reserves as “massive” and revealed plans for a joint development partnership.
“We have just concluded a Deal with the Country of Pakistan, whereby Pakistan and the United States will work together on developing their massive Oil Reserves,” Trump announced on social media. He added that Washington was in the process of selecting the oil company that would spearhead the project.
A Win for Pakistan’s Economy
The agreement — struck during Finance Minister Muhammad Aurangzeb’s visit to Washington — promises reduced tariffs on Pakistani exports, greater market access, and a push to attract US investment into Pakistan’s energy, mineral, and technology sectors.
Aurangzeb, accompanied by Pakistan’s Ambassador to the US Rizwan Saeed Sheikh and Commerce Secretary Jawad Paul, held key talks with US Commerce Secretary Howard Lutnick and Trade Representative Jameson Greer, finalizing the terms.
“This deal is a clear manifestation of a broader economic and strategic partnership that’s now taking shape,” Aurangzeb told Geo News after the signing. Aurangzeb praised the constructive dialogue with US officials and credited Pakistan’s private sector for playing a “vital role” in making the agreement possible.
As per the Ministry of Finance, the deal is intended to boost bilateral trade, expand cooperation in energy, information technology, cryptocurrency, and critical minerals, and lay the groundwork for long-term partnerships. Officials believe it will also help narrow Pakistan’s trade deficit with the US.
Strategic Impact Beyond Trade
Deputy Prime Minister Ishaq Dar, who had earlier hinted the deal was close, confirmed the breakthrough in a late-night post on X, writing: “Pakistan concludes deal with USA, AlhamdoLilah.” He hailed it as a milestone in Pakistan’s economic diplomacy and praised the efforts of both negotiating teams.
For Pakistan, the deal comes at a crucial time. With US-Pakistan goods trade valued at $7.3 billion in 2024, up from $6.9 billion the year before, the partnership is set to grow further. Yet Pakistan ran a $3 billion goods trade deficit with the US last year — a gap this agreement could help shrink.
Aurangzeb emphasized that the deal was not only about trade but also about strategic trust-building, noting that US involvement in Pakistan’s oil and energy sector could transform the country’s economic prospects.
India on the Defensive
While Pakistan celebrated, India found itself on the back foot. On the same day, Trump announced a 25% tariff on Indian goods starting Friday, citing both trade disputes and India’s continued energy ties with Russia. The penalty, harsher than tariffs imposed on other major US trading partners, threatens to derail months of negotiations between Washington and New Delhi.
Trump told reporters India had “one of the highest tariffs in the world” but suggested there was room for compromise if India made significant cuts. Analysts warn the move could severely impact Indian exporters in key industries like textiles, footwear, and furniture, where they now risk losing ground to rivals from Vietnam and China.
A Defining Moment for Pakistan
The timing could not be more significant. Just weeks ago, tensions between Pakistan and India flared after a militant attack in Indian Illegally Occupied Jammu and Kashmir. Donald claimed credit for brokering a ceasefire on May 10, highlighting Washington’s renewed involvement in South Asian diplomacy.
For Islamabad, however, the focus now shifts to delivering on the economic dividends of this historic deal. With promises of tariff cuts, investment inflows, and energy development, Pakistan’s leadership is framing the agreement as the start of a new chapter in US-Pakistan relations.
As Aurangzeb put it: “We are heading toward a partnership that is going to balance trade, investment, and strategic cooperation. This is only the beginning.”