Pakistan and US Finalizing Trade Agreement with Investment Details

Officials from Pakistan and the United States are engaged in discussions to finalize the specifics of a prospective trade agreement, which encompasses investments following Pakistan’s achievement of the lowest tariff among major South Asian countries, according to a report.

Pakistan’s updated tariff rate stands at 19%, which is more competitive than several other economies in the region. These include India (25%), Bangladesh (20%), Vietnam (20%), and Sri Lanka (20%).

Bilal Azhar Kayani stated in a television interview that the administration of Prime Minister Shehbaz Sharif is focused on securing more favorable tariff conditions on particular exports during the ongoing discussions with the United States.

Kayani commented, “The specifics of the agreement will undergo further negotiation and discussion in the coming months.”

Last month, the South Asian nation reportedly reached a trade arrangement featuring a 19% tariff. This figure is notably lower than the initially proposed 29% under a comprehensive new executive order.

Recently, relations between the two countries have strengthened. There was a rare meeting at the White House where the then President Trump hosted Pakistan’s Chief of Army Staff (COAS) Asim Munir, who was on his second visit to the US within a few months.

While announcing the trade deal, President Trump stated that the US intends to collaborate with Pakistan on the advancement of “their substantial oil reserves” and is in the process of selecting an oil firm to spearhead this collaboration.

The announcement of the deal coincided with Trump’s initiation of a tariff strategy targeting India, which included tariffs of 25%—later increased to 50%—making them among the highest imposed on any US trading partner. This action was contingent on India ceasing its procurement of Russian oil and weaponry.

In response, Trump’s tariffs have triggered calls for boycotts of American products within India.

Trump has also issued threats of elevated tariffs on Russia, along with secondary sanctions on its allies, contingent on Russian President Vladimir Putin’s actions to end the conflict in Ukraine. He has also threatened to impose sanctions on both Russia and its allies.

He further conveyed his discontent regarding India’s involvement in the BRICS group, which he characterized as “anti-US”.

Relations between the countries became strained after a source within the Indian government indicated that Indian Prime Minister Narendra Modi would be visiting China later in the month, marking his first visit in over seven years.

During the oil reserves announcement, Trump remarked that Pakistan “may be selling oil to India one day.”