Islamabad, 7 August 2025 – In a significant development for Pakistan’s trade sector, Commerce Minister Jam Kamal Khan announced that the country will avoid a projected $1 billion loss following a revision in US tariff policy. The United States has reduced its tariff on Pakistani goods from 29% to 19%, a move expected to significantly benefit Pakistan’s key textile exports.
Addressing the National Assembly, Khan highlighted that the reduction in tariffs would likely strengthen Pakistan’s trade position in the US market. “This adjustment will help increase the sale of Pakistani products, particularly textiles, which remain a cornerstone of our export economy,” he stated. In 2024, Pakistan recorded a $3 billion trade surplus with the United States, largely driven by textile shipments.
The tariff relief comes amid a sweeping US trade overhaul initiated by President Donald Trump on August 1, which imposed new import duties on 67 countries with rates ranging from 10% to 50%. However, Pakistan managed to secure a favorable 19% reciprocal tariff, significantly down from the earlier 29%, following the conclusion of a bilateral trade agreement.
Finance Minister Muhammad Aurangzeb, who led the final rounds of negotiations, praised the deal as part of “a broader economic and strategic partnership with the US.”
President Trump also revealed a new energy partnership with Islamabad, announcing via social media:
“We have just concluded a Deal with the Country of Pakistan, whereby Pakistan and the US will work together on developing their massive Oil Reserves.”
Discussions are already underway to identify an oil company to lead the collaborative exploration project.
The revised tariff regime is part of Washington’s wider economic strategy to address its trade imbalance. The policy includes steep duties on critical sectors like semiconductors, autos, steel, aluminum, pharmaceuticals, copper, and lumber. While the US aims to strengthen national industries and reduce its trade deficit, economists have warned the policy may disrupt global supply chains, trigger inflation, and provoke retaliatory measures.
Nonetheless, for Pakistan, the reduction in tariffs comes as a win that may invigorate its exports, attract foreign investment, and enhance economic ties with Washington.
