A New Chapter in Economic Partnership: US-Pakistan trade agreement
On Thursday, Pakistan and the United States announced a highly anticipated trade agreement, reached just ahead of President Donald Trump’s August 1 deadline. The agreement comes in time to avoid the imposition of higher tariffs by Washington, which were set to take effect on a reciprocal basis against various countries starting Friday (tomorrow).
Pakistan Stock Exchange Surges Sharply:
Investor sentiment stayed positive on Thursday as the stock market surged, fueled by a historic trade deal between Pakistan and the United States. This upbeat mood was further supported by ongoing confidence in macroeconomic stability and the central bank’s commitment to consistent policies.
The Pakistan Stock Exchange witnessed a strong rally, with the KSE-100 Index once again crossing the 139,000 mark. On the fourth business day of the week, the Index surged by 1,456 points at the start of trading, reaching 139,869 points.
U.S. President Donald Trump has announced a major trade agreement with Pakistan in the energy sector. Under this deal, both countries will work jointly to develop Pakistan’s vast oil reserves. The objective of this development is not only to boost bilateral economic relations but also to help reduce the U.S. trade deficit.
Benefits of the Deal for Pakistan:
The U.S. and Pakistan have finalized a historic trade agreement aimed at enhancing bilateral trade, expanding market access, creating investment opportunities, and promoting cooperation across various sectors.
According to a statement from Pakistan’s Ministry of Finance, the agreement was finalized today in Washington, D.C., during a meeting between Pakistan’s Federal Finance Minister Senator Muhammad Aurangzeb, U.S. Secretary of Commerce Howard Litnick, and U.S. Trade Representative Ambassador Jamison Greer.
Also present at the meeting were Pakistan’s Secretary of Commerce Jawad Paul and Pakistan’s Ambassador to the U.S., Rizwan Saeed Sheikh. President Donald Trump announced the important deal via a post on the social media platform Truth Social.
Cooperation on Oil Reserves:
President Trump stated that a major trade agreement has been reached with Pakistan in the energy sector, under which both nations will work together to develop Pakistan’s large oil reserves. He emphasized that the goal is to enhance economic ties and help reduce the U.S. trade deficit.
In his statement on Truth Social, Trump said:
“We have just finalized a deal with Pakistan under which both countries will jointly develop Pakistan’s large oil reserves.”
In April, the United States announced tariffs that could have imposed a 29% duty on Pakistan’s exports. These tariffs, targeting several countries globally, were later put on hold for 90 days to allow for negotiations.
Had these tariffs been implemented, they would have posed a major challenge for Pakistan, given that the total US-Pakistan goods trade was valued at approximately $7.3 billion in 2024, up from about $6.9 billion in 2023, according to the Office of the US Trade Representative.
Moreover, the US trade deficit in goods with Pakistan reached $3 billion in 2024, marking a 5.2% rise compared to the previous year.