Pakistan and the United States last week achieved a trade and tariff agreement days before the July 9 deadline imposed by U.S. President Donald Trump—though the signing of a final agreement is awaiting approval by Islamabad.
A Pakistani delegation, led by the Commerce Ministry and including trade body representatives, traveled to Washington last week to secure a long-term, fair trade agreement. The ultimate aim of the deal is to prevent the re-imposition of a 29% tariff on Pakistani exports, primarily textiles and agricultural products, paused by Trump earlier this year.
According to a senior official of the Commerce Ministry, the Pakistani team—led by Secretary Commerce Jawad Paal—completed talks with U.S. officials on Friday. They said the U.S. had wanted more access to Pakistani markets, especially for its cotton, machinery, and crude oil exports. Currently, 90% of U.S. goods enter Pakistan without any duty under the existing Trade and Investment Framework Agreement (TIFA), but the U.S. has sought the removal of tariffs on all items to boost the country’s exports. In 2024, bilateral trade between the two countries crossed $7 billion, with Pakistan exporting over $5 billion worth of goods to the U.S. and the U.S. exporting $2.1 billion in goods to Pakistan.
During the discussions, Pakistan has asked for a better trade deal along the lines of a Preferential Trade Agreement (PTA) or Free Trade Agreement (FTA), noting the existing setup has not yielded significant economic benefits. Islamabad also aims to boost American investment in Pakistan’s mining, energy and infrastructure in exchange for importing more U.S. goods.
The final agreement, according to the official, is pending approval by Islamabad, with authorities expected to hold internal discussions about its tariff structure before moving forward. A formal announcement would likely follow the U.S. completing ongoing negotiations with all its trade partners.