Pakistan Aims to Boost US Trade and Investment

Finance Minister Muhammad Aurangzeb has stated that Pakistan intends to increase its procurement of American commodities, specifically cotton and soybean, and dismantle non-tariff barriers to mitigate the impact of elevated tariffs imposed during President Donald Trump’s administration.

In a recent interview, Aurangzeb conveyed Pakistan’s receptiveness to foreign direct investment (FDI) from US enterprises, particularly within its newly accessible minerals and mining sectors. Furthermore, plans are underway to introduce Pakistan’s inaugural Panda bond, projected to range between $200 million and $250 million later this year.

Aurangzeb emphasized the nation’s commitment to revitalizing its economy following the near-default situation of 2023. He also noted the preliminary approval of a $2.3 billion loan from the International Monetary Fund (IMF), ensuring financial predictability through 2027.

The finance minister highlighted that Pakistan is actively seeking to procure more goods from the US and eliminate non-tariff obstacles to circumvent the substantial tariffs enacted by President Trump. He stated, “We are envisioning a broader scope in our engagement with the US,” and added, “We are prepared to engage constructively, with a formal delegation visit planned.”

Aurangzeb elaborated on Pakistan’s interest in importing more cotton and soybean from the US. Discussions are also in progress to dismantle trade barriers, paving the way for increased access of US products to Pakistani markets.

“We are open to addressing any concerns related to non-tariff discussions, including potentially burdensome inspections on US products at our end,” Aurangzeb commented.

Islamabad is making efforts to engage the US in hopes of securing relief from the 29 per cent reciprocal tariffs previously enforced by President Trump. While these tariffs are currently suspended until July, Pakistan intends to dispatch a trade delegation to Washington in the coming months to address the trade imbalance. The US stands as Pakistan’s primary export destination, accounting for over $5 billion in annual exports as of 2024, whereas Pakistan’s imports from the US amount to approximately $2.1 billion.

Aurangzeb also affirmed the country’s openness to FDI from American companies within its recently inaugurated minerals and mining industries.

Aurangzeb is currently in the US for a week-long visit to participate in the Spring Meetings of the IMF and the World Bank.

The former banker stated that Pakistan aims to utilize international capital markets to acquire additional funds for sustained expansion. “Our focus is on breaking free from the cyclical pattern of boom and bust that has plagued Pakistan and transitioning towards a path of sustainable growth,” he stated.

Pakistan is poised to issue its first Panda bond, with expectations of raising between $200 million and $250 million, likely to occur in the fourth quarter of this year. Recently, Fitch Ratings upgraded Pakistan’s credit rating, expressing confidence in the nation’s capacity to uphold reforms under the IMF loan arrangement.