As Pakistan gets involved with the USA. UU. In the details of a commercial agreement, one that includes a partial tariff relief, reducing rates from 29 percent to 19 percent, and explores the deepest commercial ties, including possible imports and US investment. UU. In key sectors, the private sector has responded with cautious optimism.
The rate reduction means a significant reversal of the increase in the rate imposed on April 2, 2025, when Washington, under its policy of ‘reciprocal tariffs’, introduced additional tariffs into more than 60 commercial partners to address commercial imbalances. These rates ranged between 10 and 50 percent, with Pakistan initially placed on the highest support, along with other developing states.
Beyond the public statements of the president of the United States, Trump and Pakistani leadership, detailed information about the trade agreement remains scarce in the public domain. Key official sources, such as the United States Department of Commerce, have not yet published details of the agreement.
The existing trade and investment framework agreement, signed in 2003, probably continues to serve as the main platform for bilateral discussions. Also in Pakistan, economic ministries have not yet published complete details online.
While tariff relief is a positive development, industry experts warn that it only addresses a face of the broader commercial competitiveness challenges of Pakistan
However, media reports suggest that Pakistan has agreed to offer tax free access to US goods and facilitate US investment in key sectors such as oil, minerals and cryptography. As reported, more than 4,000 American products now face zero rates in Pakistan.
“The objective is to translate recent diplomatic progress in tangible economic gains,” shared a senior official with confidence. “We are hope that more tariff concessions, particularly in the light of the growing imports of oil and other assets of the United States. Currently, the commercial balance is in our favor, although the total volume is relatively modest.
“Now the responsibility is in the private sector. They must assume the occasion and capitalize on the relative advantage that this agreement offers on regional competitors in the US market,” he added.
After recent developments, a Pakistani refinery has ensured a shipping of crude oil from the United States, which is expected to arrive soon.
Usamama Qureshi, vice president of Cneryico PK LTD, confirmed the oil agreement, stating: “The Government encouraged the refining sector to explore the raw imports of the United States as part of the efforts to strengthen bilateral trade. We evaluate the west of intermediate Texas for its price, performance performance and economical loading. Once we discover that we find it commercially. one million barrels per month. “
Haroon Akhtar, special advisor to the Prime Minister on Industries and Production, currently on an official visit to Osaka, Japan, quickly responded to consultations and shared an optimistic vision of commercial participation in evolution with the United States.
“Pakistan has exportable surplus capabilities in various industries, especially in added value textiles, which have a strong potential to increase exports,” he said.
He clarified that commercial conversations with the United States are formally directed by the Ministry of Commerce. “I serve in the Steering Committee of the Prime Minister who supervises the commercial terms, but the Ministry of Industries is not part of the negotiation team,” he added.
When commenting on the participation of the private sector, Akhtar said: “Extensive consultations with private businesses were made at each stage of the negotiation process.”
Tax reduction has strengthened Pakistan’s competitive position in the US market. While regional rivals such as Bangladesh, Sri Lanka and Vietnam face a 20 percent rate, and India up to 50PC, Pakistani exports now benefit from a rate of 19 percent relatively lower. The United States remains one of Pakistan’s main export destinations, with the commercial surplus driven by textile shipments.
According to the commercial representative of the United States, the total bilateral trade of goods and services between the United States and Pakistan reached $ 10.1 billion in 2024. This included $ 7.2 billion in the trade of goods and $ 2.9 billion in services. The United States registered a commercial deficit of goods of $ 3 billion, with exports to Pakistan to $ 2.1 billion and imports from Pakistan at $ 5.1 billion. In services, however, the United States had a surplus modest of $ 610 million, exporting $ 1.7 billion and importing $ 1.1 billion.
While tariff relief is a positive development, industry experts warn that it only addresses a face of the broader commercial competitiveness challenges of Pakistan. Structural bottlenecks, such as high energy costs, complex tax procedures and reimbursement, and changes in erratic policy, continue to undermine the country’s capacity to completely take advantage of international market opportunities.
Unlike Mr. Akhtar, Dr. Khurram Tariq, former president of the Faisalabad Chamber and current president of Kay and Emms, expressed his disappointment for the exclusion of representatives from the private sector of the conversations of commercial agreement of the United States. “I was part of the planning work group, but none of the four members of the private sector was taken to the negotiation trip, even though we offered to autofinance,” he said.
Although he recognized the 1 percent advantage over Bangladesh, Sri Lanka and Vietnam, he called it “notional” given the much higher production costs of Pakistan due to the high interest rates and energy prices. “If we had parity with countries that face additional 10 percent tariffs, such as Türkiye or Egypt, exports could have increased significantly and help address our currency needs,” he added.
Musadiq Zulqarnain, an outstanding exporter, supported government conversations led by the government, citing the various interests in all sectors. “While textiles and clothing are key, other products are also important, and the conversations go beyond exports to a broader trade and investment. Taking entrepreneurs could complicate things. That said, the government has remained in consultation, both locally and during conversations. I have been in contact personally in everything,” he said.
Published in Dawn, The Business and Finance Weekly, August 18, 2025
