In response to the growing concerns over new US tariffs on Pakistan’s exports, Prime Minister Shehbaz Sharif has endorsed a plan to engage in negotiations with the United States, offering lower tariffs and increased market share to mitigate potential losses.
The proposal comes as reports indicate that the new tariffs could result in a significant reduction in Pakistan’s exports to the US, potentially losing between $564 million to $2.2 billion.
Prime Minister Sharif, during a meeting on the tariffs and Pakistan’s export strategy, decided to send a high-level delegation to Washington. The delegation will include prominent businessmen and exporters, tasked with negotiating the implications of the tariffs and promoting bilateral trade relations. The delegation’s goal is to explore ways to establish a more balanced and mutually beneficial trade framework between the two nations.
According to media reports, the government plans to reduce tariffs on around 55 products while staying within the World Trade Organization (WTO) framework. These reduced tariffs would align largely with those granted to China under the bilateral Free Trade Agreement (FTA). The government has also prepared responses to the non-tariff concerns raised by the US, including the ban on social media platform X, restrictions on profit repatriation, and other barriers to trade.
The prime minister has tasked the delegation with negotiating the reversal of the additional tariffs imposed on Pakistani goods. One option under consideration is lowering tariffs on cotton, soybeans, and petroleum products, with cotton already benefiting from a zero-tariff status. The government aims to assure US authorities of additional imports, particularly in cotton, to strengthen the trade relationship. A working group has also been set up to finalize these proposals.
On the day that the enhanced tariffs on 60 countries, including Pakistan, took effect, some Pakistani exporters reported receiving “halt requests” from US buyers. The new tariffs, imposed as part of a broader trade war between the US and China, include a 29% hike on Pakistani goods, aimed at reversing the $3 billion trade deficit with Islamabad.
A report by the policy think tank, Tabadlab, warned that the 29% tariff increase could cause Pakistan’s exports to the US to decline by $564 million in the first year, with the potential loss rising to $2.2 billion in a worst-case scenario.
The Prime Minister’s Office has indicated that the discussions between the Pakistani delegation and US authorities would focus on securing a reversal of the additional tariffs or at least reducing them to competitive levels, similar to those imposed on countries like Egypt and Turkey.
The meeting was attended by Finance Minister Muhammad Aurangzeb, Commerce Secretary Jawad Paul, and senior government officials, who presented the Prime Minister with alternative courses of action. The government has indicated that some of these proposed actions may require approval from the Economic Coordination Committee (ECC) and the Cabinet.
The Prime Minister’s office confirmed that the Pakistani Embassy in Washington is in constant communication with US authorities, with the goal of addressing the immediate challenges posed by the new tariffs and exploring pathways for long-term trade cooperation.
