Islamabad:
As the government is tightened at the fine points of the US Pakistani trade agreement, background discussions suggest that Washington may have gained market access to zero-duty rates in return for investing in critical sectors and providing Islamabad with regional peers.
Field Marshal Asim Munir’s meeting with President Donald Trump and Pakistani resellers’ positive approach to solving the issue before the deadline of August 1 played a role in ensuring a better and early agreement.
Tariffs on Pakistani exports will be lower than regional competitors from South Asia and Southeast Asia, mainly India, Vietnam and Indonesia.
Pakistan’s main dealer, Finance Minister Muhammad Aurangzeb, called it a “real win-win agreement” for both countries that have protected Pakistani exports from retaliatory rights. But the final tariffs may be higher than the prior mutual tariffs of about 9.8%.
The United States can now export goods to Pakistan to almost zero rates, but the effective date of zero -tariffs may be from July 2026 due to necessary regulatory changes, the Pakistani authorities said on condition of anonymity.
No tariffs on US goods will benefit consumers who want quality products, but still their prices may be more than made-in-china products.
In contrast, US tariffs on Pakistan will be lower than 29%, as President Donald Trump announced in April compared to the average 9.8% prevailing rates at that time.
Aurangzeb said the United States will also invest “first in energy, then in minerals, mines, information technology, digital infrastructure and new economy”.
People who are interested in several rounds of trade discussions said on Thursday that the United States had set two important demands on a trade agreement with Pakistan: lower tariffs on its exports to Pakistan to zero with total access to markets; and exemption from its companies from 5% tax introduced in accordance with the law on digital presence proceeds 2025.
Hours before President Donald Trump’s announcement that his administration was reaching an agreement with Pakistan, the Federal Board of Revenue issued a message to withdraw 5% tax.
Trade Secretary Jawad Paul, who was part of the negotiation team, did not comment on whether Pakistan accepted the US demand for zero dictionaries with complete market access.
There was no formal notice from any of the pages about which customs were agreed, but the Pakistani Embassy in Washington said the agreement “will result in the reduction of mutual duty (29%), especially on Pakistani exports to the United States”.
The deal was reached during a meeting in Aurangzeb, US trade secretary Howard Lutnick and US Trade Representative Ambassador Jamieson Greer. Trade Secretary Jawad Paul and Pakistan’s ambassador to the American Rizwan Saeed Sheikh was also present during the meeting.
The sources said Pakistan had expected the United States that the US would, in turn, set import tariffs in the range of 15%to 19%, preferably close to 15%, which is lower than the retaliatory rate, but higher than the pre-april rates.
Until the filing of the story, no one of the United States or the Pakistani government was published on the final duty of Pakistan.
Pakistan also sought concessions for exporting its agricultural products, the sources said.
One thing was clear that Pakistan will not be in an unfavorable position compared to regional countries because of its constructive approach to dealing with the issue, another government official said.
One of the questions may be any concerns that appear by Pakistan’s other trading partners. To handle the case, there is a possibility that both sides show intentions to sign a preference agreement or a free trade agreement, the sources said.
President Donald Trump also talked about exploring Pakistan’s oil reserves with US companies. An official in the Petroleum Division said there was a possibility that any US business can participate in the upcoming offshore drilling.
Express Pakinomist reported last week that Petroleum Division sought bids from interested investors to grant rights to the boring on offshore well, and it would open bid on October 31, 2025.
The report also stated that former Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) were struggling to find carbon hydrerver in an offshore zone in Arabian Hav in connection with US energy giant ExxonMobil and Italian company ENI. Pakistan has made 17 attempts to do offshore drilling, but they did not give the desired results.
“From our perspective, it always went beyond the immediate trade imperative. The whole point of this is that trade and investment must go hand,” the finance minister said after reaching the agreement with the United States.
“The role of the private sector is prominent, because when we tried to figure out how to reduce or end trade imbalance, the private sector was the first component to come up and said they will help,” Aurangzeb said.
In the last financial year, Pakistan exported $ 6 billion to the United States compared to $ 2.4 billion imports, earning a $ 3.7 billion profit, a source of concern for President Donald Trump.
