Pakistan and the United States have agreed to fast-track efforts toward a trade agreement as both nations face rising tensions over newly imposed reciprocal tariffs. The move follows US President Donald Trump’s decision to raise duties on several countries, including Pakistan, sparking concerns about global trade stability.
Virtual Meeting Sparks Momentum
On June 16, Pakistan’s Finance Minister Muhammad Aurangzeb held a virtual meeting with US Commerce Secretary Howard Lutnick. The discussion centered on the impact of the new tariffs and how both sides could move forward. According to Pakistan’s finance ministry, both parties expressed a shared commitment to finalize a trade deal as soon as possible.
Tariffs Threaten Pakistan’s Key Exports
The US recently imposed a steep 29 percent tariff on Pakistani exports, with textiles—Pakistan’s largest export sector—likely to suffer the most. Nearly 90 percent of Pakistan’s exports to the US are textiles, making the country highly vulnerable to such trade policies.
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Pakistan exported goods worth $5.44 billion to the US in 2024. From July 2024 to February 2025 alone, exports reached $4 billion, marking a 10 percent increase compared to the same period last year. But the sudden tariff hike could reverse these gains and hit the country’s fragile economy hard.
Roadmap for Technical-Level Talks
During the meeting, both sides agreed to continue technical-level discussions in the coming days. They are working on a mutually agreed roadmap aimed at resolving the tariff issue and deepening economic cooperation.
Concerns Over Regional Competition
Trade analysts warn that the tariffs may damage Pakistan’s global competitiveness. If countries like China, Vietnam, and Bangladesh pivot more aggressively toward European markets, Pakistan could lose ground in alternate destinations, worsening its trade position.
Growing Urgency for a Deal
With economic recovery still underway after the COVID-19 pandemic, both nations appear eager to avoid further disruptions. The US remains Pakistan’s top export market, making a swift resolution not only desirable but essential for economic stability.
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