Finance Minister Muhammad Aurangzeb on Tuesday said that Pakistan and the United States have agreed to accelerate discussions on reciprocal tariffs and broader economic cooperation, following what he described as a constructive exchange with US Commerce Secretary Howard Lutnick.
Speaking at an event in Islamabad, the minister said both countries are committed to advancing technical-level talks aimed at finalising a mutually beneficial trade agreement. “We are moving in the right direction,” Aurangzeb stated, underscoring efforts to strengthen Pakistan-US economic ties through targeted reforms and negotiation.
The minister’s remarks come as Pakistan faces the imposition of up to 29% in tariffs on its exports to the US, part of broader trade measures Washington announced in April that affect several countries with significant trade surpluses with the US. Pakistan recorded a $3 billion surplus with the US last year, making it vulnerable to the new tariff regime.
Aurangzeb said that meaningful engagement on trade and investment is underway and that both governments are working towards a structured roadmap to resolve tariff-related issues. “Technical-level discussions will continue in the coming days to develop a mutually agreed framework,” he added.
Highlighting ongoing domestic reforms, the finance minister reaffirmed the government’s commitment to its reform agenda in taxation, energy, and trade policy. “We’ve already initiated tariff reforms to transition toward a more competitive economy,” he said.
Aurangzeb also pointed to progress in public-sector pension reforms, calling the recently introduced Defined Contribution Pension Scheme a “win-win” for both the government and employees. As per the reform, implemented following Economic Coordination Committee (ECC) approval last year, federal employees contribute 10% of their basic pay, while the government matches with 20%.
He also announced a 7% increase in pensions for retired government employees, in line with inflation. Additionally, the government has proposed a 5% tax on annual pensions exceeding Rs10 million, a move aimed at targeting high-income retirees while protecting lower-income pensioners.
Aurangzeb’s statements come amid a pause in scheduled diplomatic engagements between Islamabad and Washington. Two visits — one by Deputy Prime Minister and Foreign Minister Ishaq Dar, and another by a Pakistani trade delegation — were postponed due to the escalating conflict in the Middle East, official sources confirmed.
The postponed visits were to be part of a broader series of high-level bilateral interactions as Pakistan navigates a complex regional landscape, following heightened tensions in South Asia and ongoing instability in the Gulf region.
Despite the delay, officials on both sides maintain that economic diplomacy remains active, with trade negotiations and sectoral cooperation continuing via institutional and virtual channels.
