U.S. Secretary of State Marco Rubio with Pakistani Foreign Minister Ishaq Dar

Pakistan and the United States are close to finalising a significant trade agreement aimed at resetting and strengthening their economic relationship, with Pakistani officials expressing optimism that the deal could be concluded in days rather than weeks as of late July 2025.

The trade talks, which have been ongoing amid tensions due to the 29% US tariffs imposed on Pakistani exports under the Trump administration to reduce trade imbalances, focus on establishing a long-term reciprocal tariff agreement to protect Pakistan’s access to the US market, particularly for textiles and agricultural products which constitute the bulk of Pakistan’s exports to the US.

Pakistani Finance Minister Muhammad Aurangzeb described the recent talks in Washington as “very constructive” and noted a clear commitment from both sides to resolve outstanding issues to reach a deal.

The agreement in the works is expected to not only prevent the reinstatement of high tariffs on Pakistani exports but also to increase Pakistani imports of US goods, including crude oil.

It is also envisioned to open the door for increased American investment in key sectors of Pakistan’s economy such as mining, energy, digital infrastructure, and technology. Projects like the Reko Diq copper and gold mine have been mentioned as potential beneficiaries of this enhanced bilateral economic partnership.

Pakistan has proposed a zero-tariff bilateral trade deal on selected tariff lines to boost trade volume mutually beneficially, signalling willingness to give greater market access to US products while seeking to maintain its export competitiveness.

The talks have been set against a backdrop of geopolitical complexities and the broader US strategy to correct trade deficits, with Pakistan's surplus with the US estimated at around $3 billion in 2024. Both sides have expressed intention to move the relationship beyond trade into broader investment and strategic partnership domains.

Meanwhile, the US side, while making no public commitment to a firm timeline, has shown flexibility on the earlier July 9 deadline originally set for the tariff suspension, with Pakistani officials pushing for early closure to avoid uncertainty.

US officials have indicated that a formal announcement on the trade deal will come once ongoing negotiations with other trade partners are completed. The US has emphasised a strategic approach involving trade, investment, technology cooperation, and counter-terrorism aligned with broader bilateral ties.

Pakistan is nearing a breakthrough in trade negotiations with the United States that aims to eliminate punitive tariffs on exports, boost bilateral trade through reciprocal tariff relief and imports of US goods, and expand economic cooperation into investment and strategic sectors.

The completion of this deal is seen as crucial for Pakistan’s export-dependent economic recovery and could mark a new phase in Pakistan-US economic relations, though Washington has not provided a fixed timeline for when the deal will be officially concluded. Pakistani officials remain hopeful for finalisation imminently.

Based On A Reuters Report