PM Shehbaz Sharif has backed a strategic plan to initiate tariff negotiations with the United States, aiming to reduce duties and offer a larger market share to American goods. This move comes in response to a study warning that a recent tariff hike could slash Pakistan’s exports by $564 million to $2.2 billion.
According to officials with knowledge of these talks, the administration intends to lower duties on about 55 products by staying inside the framework of the World Trade Organization, which would provide comparable advantages to other countries.
According to individuals who spoke to The Express Tribune, these reduced duties would essentially match the rates that China is entitled to under the bilateral Free Trade Agreement (FTA). The government is also ready to respond to non-tariff issues brought up by the United States, such as the prohibition on X, limitations on profit repatriation, and other such obstacles.
Some Pakistani exporters received “halt requests” from US purchasers on the same day that the increased tariffs on 60 countries went into effect.
According to a brief from the policy think tank Tabadlab, the 29% increase in tariffs on Pakistani commodities will result in a loss of almost $564 million in exports to the United States in the first year of 2025–2026. In the rare worst-case scenario, the loss may reach $2.2 billion, it added.
A discussion on US tariffs amid the growing trade war between the US and China was led by Prime Minister Shehbaz Sharif on Wednesday. In further retaliation, Beijing on Wednesday levied an additional 34% tariff on US exports, matching Washington’s 104% charges on the second-largest economy in the world.
In an effort to close the $3 billion trade deficit with Islamabad, the US has levied additional 29% taxes on Pakistani goods. The United States is concerned about online limitations, especially those on social media site X, and non-tariff trade obstacles.
The report from the Working Group and Steering Committee on the new US tariffs and the suggested next steps was given to the prime minister. Several other options were given to the meeting.
These committees, which are led by Finance Minister Muhammad Aurangzeb and Commerce Secretary Jawad Paul, were established by the PM last week.The government has chosen to send a high-level delegation to the US to discuss US tariffs imposed by US President Donald Trump’s administration and to advance trade relations, according to a statement released by the PM’s Office.
According to a statement from the PM’s Office, Shehbaz Sharif has given the delegation—which would also include well-known exporters and businesspeople—the job of determining a mutually advantageous future course of action.
According to the sources, the government’s strategy called for lowering the tariffs and promoting the growth of the market share of US imports in exchange for reversing the higher levies.
The alternatives include lowering tariffs on about 55 product lines, with cotton, soybean, and petroleum items receiving the biggest benefits.
According to a statement from the PM’s Office, Shehbaz Sharif has given the delegation—which would also include well-known exporters and businesspeople—the job of determining a mutually advantageous future course of action.
According to the sources, the government’s strategy called for lowering the tariffs and promoting the growth of the market share of US imports in exchange for reversing the higher levies.
The alternatives include lowering tariffs on about 55 product lines, with cotton, soybean, and petroleum items receiving the biggest benefits.
According to the sources, there are currently no import duties on cotton, and the government intends to reassure US authorities about further imports of the product. In order to complete these suggestions, the prime minister established a second working group on cotton.
Cabinet approval, including from the cabinet’s Economic Coordination Committee, may be required for certain of the approved plan’s features.
Pakistani authorities wanted to identify a middle group to preserve their market share, but they believed that they could not import goods to make their industries uncompetitive.
Pakistani plan includes seeking a reversal to pre-April-4th position or at least bringing down the additional tariffs to the levels of its competitors like Egypt and Turkey, said the sources.
“The US-Pakistan trade relations span decades,” said PM Shehbaz, adding that the government is keen to further strengthen its trade partnership with the US.
The meeting was informed that the Pakistani Embassy in the US is in constant contact with the US government.
According to the sources, there are currently no import duties on cotton, and the government intends to reassure US authorities about further imports of the product. In order to complete these suggestions, the prime minister established a second working group on cotton.
Cabinet approval, including from the cabinet’s Economic Coordination Committee, may be required for certain of the approved plan’s features.
Pakistani authorities wanted to identify a middle group to preserve their market share, but they believed that they could not import goods to make their industries uncompetitive.
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Q1. Why have US tariffs on Pakistani products increased in 2025?
The United States imposed an additional 29% tariff on Pakistani goods in 2025 as part of efforts to reduce its $3 billion trade deficit with Pakistan and due to concerns over non-tariff barriers, including digital restrictions like the ban on social media platform X.
Q2. How much could Pakistan lose due to the new US tariffs?
According to Tabadlab, Pakistan could lose between $564 million to $2.2 billion in exports due to the tariff hike, depending on the scenario.
Q3. What is Pakistan doing to respond to the US tariff increase?
The Pakistani government, under Prime Minister Shehbaz Sharif, plans to negotiate with the US by offering reduced tariffs on around 55 products and increasing the market share for US goods such as cotton, soybean, and petroleum products.
Q4. Is the tariff reduction plan WTO-compliant?
Yes, the proposed tariff adjustments are designed to remain within the framework of the World Trade Organization (WTO), ensuring other nations can benefit under similar terms.
Q5. Which products are included in Pakistan’s tariff reduction plan?
The plan includes cotton (which already has zero duty), soybean, and petroleum products, along with 50+ other items to attract US interest and reverse the new tariffs.
Q6. What are the non-tariff issues raised by the United States?
The US has expressed concerns about restrictions on online platforms (e.g., X), profit repatriation limitations, and other market entry barriers impacting US businesses in Pakistan.
