ISLAMABAD: Pakistan’s Ministry of Commerce has reportedly initiated discussions with key stakeholders to rationalize tariffs in Pakistan-US bilateral trade, including a proposal for a zero-tariff agreement on selected sectors. The process, sources say, is being conducted with unusual discretion, raising eyebrows among government officials and trade experts.
Credible sources within the government revealed that the Ministry of Commerce, in collaboration with the Ministry of Finance, has been holding closed-door consultations to explore possible tariff adjustments with the United States. These efforts follow recent diplomatic overtures from Washington aimed at expanding bilateral economic engagement.
However, in an unorthodox approach, officials participating in the meetings were reportedly barred from bringing written proposals or documents. Instead, they were asked to provide verbal feedback only, with ministry officials recording the responses without maintaining any written record. According to multiple participants, this method is unprecedented in trade policymaking and appears to be aimed at keeping the deliberations off the public and bureaucratic record.
“It was the first time we were asked not to submit any written feedback. Everything had to be said verbally, and it appeared they did not want anything on record,” said one official who attended the meetings but requested anonymity due to the sensitivity of the matter.
Only a select group of high-ranking officials within the Commerce Ministry and Finance Minister Muhammad Aurangzeb are reportedly aware of the specific tariff lines or concessions being proposed. Insiders warn that certain conditions discussed in the meetings could pose long-term risks to Pakistan’s export interests if accepted without proper consultation or safeguards.
Among the sectors reportedly under consideration for tariff relaxation are soybean imports—a long-standing US demand—as well as facilitation in the mining and extractive industries. These areas could see reduced or even zero tariffs under the new framework being explored.
The drive for renewed trade engagement comes in the aftermath of US President Donald Trump’s claim that his administration successfully brokered a ceasefire between Pakistan and India following a period of escalating military tensions. Speaking at the Saudi-US Investment Forum 2025, Trump touted economic diplomacy as a key part of that effort.
“Let’s not trade nuclear missiles. Let’s trade the things that you make so beautifully,” Trump said, adding that trade incentives played a significant role in defusing the crisis.
As a follow-up to that diplomatic thaw, sources say Pakistan has proposed a zero-tariff bilateral trade framework based on mutual gains, aiming to expand access to the US market while offering strategic incentives to US firms.
However, economic experts caution that any agreement must be carefully structured. “A zero-tariff deal sounds attractive but must be thoroughly assessed for sectoral impact. Pakistan must ensure reciprocity and strategic protections for its key industries,” said a senior Islamabad-based trade analyst.
While the Ministry of Commerce has not made any public statements, further clarity emerged on Wednesday when Pakistan’s Finance Ministry announced that Islamabad and Washington have agreed to conclude ongoing trade talks by next week.
According to an official statement, Finance Minister Muhammad Aurangzeb held a meeting with US Commerce Secretary Howard Lutnick, during which both sides expressed satisfaction with the current round of discussions. They also reaffirmed their commitment to finalize the negotiations soon and explore a longer-term strategic and investment partnership.
The talks are reportedly aimed at offsetting steep tariffs on Pakistani exports, which currently face a 29% duty under Trump-era trade measures targeting countries with significant surpluses. Pakistan’s trade surplus with the US stood at around $3 billion in 2024.
In an effort to balance the equation and soften US duties, Pakistan has offered to increase imports of US goods, including crude oil, and to provide investment-friendly concessions for US companies, particularly in the mining sector.
As trade officials continue to hold deliberations behind closed doors, many in Pakistan’s business community remain largely uninformed about the details and direction of a deal that could have far-reaching implications for the country’s economy.
