Pakistan begins formal talks with US over new tariffs

Pakistan has officially launched negotiations with the United States over newly imposed "reciprocal tariffs," the country’s finance ministry confirmed on Friday. Finance Minister Muhammad Aurangzeb held a conference call with U.S. Trade Representative Ambassador Jamieson Greer on May 30 to initiate the talks.

The discussions come in response to steep tariffs introduced earlier this year by U.S. President Donald Trump on multiple countries—a move criticized for threatening the global economic recovery following the COVID-19 pandemic. Defending the policy, Trump argued the tariffs were needed to address trade imbalances and counter what he described as the unfair treatment of American products abroad.

Pakistan was among the affected nations, facing a 29% tariff on its exports. The move is particularly significant for Islamabad, which is currently emphasizing export-led growth as part of its broader economic strategy.

In April, Finance Minister Aurangzeb acknowledged the tariffs posed both a challenge and an opportunity, expressing hope that the development could help reset trade ties. He also indicated that a high-level delegation would soon visit Washington to continue the negotiations in person.

“Pakistan’s formal negotiations on U.S. reciprocal tariffs kick-started between Mr. Muhammad Aurangzeb, Pakistan’s Finance Minister and Ambassador Jamieson Greer, United States Trade Representative through a telephonic/conference call on 30th May, 2025,” the finance ministry said in an official statement.

The statement added that both sides engaged constructively and agreed to hold technical-level discussions in the coming weeks. “Both parties expressed confidence in moving the process forward toward a timely and successful conclusion,” it noted.

The United States remains Pakistan’s largest export market. In 2024, Pakistan exported $5.44 billion worth of goods to the U.S., according to the State Bank of Pakistan. From July 2024 to February 2025, exports to the U.S. rose 10% year-on-year to reach $4 billion.

Textiles account for nearly 90% of these exports, and analysts warn that this sector stands to be the hardest hit by the new tariffs. Experts have also cautioned that Pakistan’s competitiveness could suffer if regional rivals such as China, Bangladesh, and Vietnam redirect their exports to Europe, increasing competition in other markets.