Pakistan seeks zero-tariff trade deal with US

Pakistan is seeking a new trade arrangement with the United States with no tariffs after Islamabad gained recent prominence in Washington following a US backed ceasefire with India, a senior government official in Islamabad on Thursday told HUM News English.

The initiative follows president Donald Trump’s offer while announcing the ceasefire, to “substantially” increase trade with India and Pakistan – a step largely seen as Washington’s incentive to the two nuclear armed south Asian countries.

In announcing the Indo-Pakistan ceasefire on his Truth Social account, Trump had praised India and Pakistan for showing “strong and unwaveringly powerful leadership” adding that he was “going to increase trade substantially with both of these great nations”.

Earlier this year, while announcing sweeping tariffs on countries around the world who trade with the United States, president Trump’s administration announced a 29 per cent tariff increase on Pakistan’s exports to the US. Officials in Islamabad said at the time, the US decision was in response to Washington’s conclusion that it had a trade deficit with Pakistan which had to be eliminated, similar to the US treatment of other countries with a trade deficit.

The decision was subsequently paused for 90 days by the US administration. In Islamabad, senior government officials in April told HUM News, they were exploring ideas such as importing oil from the US to improve the trade balance in Washington’s favor.

However, Pakistan has emerged with a militarily upper hand versus India and gained recognition for possessing a highly capable network of defense forces. The decision to offer zero tariff on bilateral trade with the US is driven by the conclusion that Pakistan needs to follow up on president Trump’s offer after the ceasefire.