Significant progress has been made in bilateral trade negotiations between the United States and Pakistan, with both parties agreeing to finalise a reciprocal-tariff deal by next week.
U.S. Commerce Secretary Howard Lutnick and Finance Minister Muhammad Aurangzeb met virtually on June 24, 2025, and officials expressed satisfaction with ongoing discussions and agreed to conclude technical-level talks as soon as possible.
They also planned to follow up on the trade agreement with a more comprehensive strategic and investment partnership covering areas of mutual interest.
Reciprocal Tariffs:
The core of the negotiations centers on lifting or reducing the 29% U.S. tariff imposed on Pakistani exports. Both sides have been ironing out technical details to ensure that Pakistan’s key goods remain competitively priced in the U.S. market, while America’s exporters secure fair treatment in Pakistan.
Strategic and Investment Cooperation:
Beyond tariffs, the two governments agreed to establish a framework for deeper investment ties, including potential U.S. financing for Pakistan’s mineral sector (notably the $7 billion Reko Diq copper-gold project) and expanded import of U.S. goods such as energy supplies.
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- Timeline:
Both nations are under pressure to complete the accord before enforcement commences because the punitive tariffs are scheduled to be suspended in July. Officials are optimistic that the agreement will be signed next week, protecting Pakistan’s export earnings and preventing any disruption to the more than $5 billion in yearly bilateral trade.
- Economic Relief for Pakistan:
Concluding the tariff deal will prevent costly trade penalties from taking effect, helping Pakistani exporters particularly textile and agricultural sectors maintain market access and revenue stability.
- Investor Confidence:
A formalized trade and investment pact is likely to boost foreign direct investment into Pakistan by signaling policy consistency and deeper economic ties with the world’s largest economy.
- Geopolitical Significance:
At a time of shifting global alliances, strengthening Pak-U.S. economic relations can serve as a stabilizing factor in South Asia and provide Pakistan with more diversified trade and financing options.