Pakistan–U.S. Trade Talks 2025: Tariff Relief, Export Boost & Economic Growth

A Historic Trade Reset in the Making

In a major diplomatic and economic move, Pakistan and the United States are finalizing high-level trade negotiations, expected to conclude in early July 2025. These talks aim to reduce the crippling 29% tariffs on Pakistani exports and unlock billions in U.S. investment—especially in mining and energy sectors like the Reko Diq project.

The stakes are high: this could be Pakistan’s biggest trade shift since the GSP+ deal with the EU.

Why Pakistan–U.S. Trade Talks 2025

1. High Export Tariffs Hurting Pakistan

Since 2020, Pakistani exports to the U.S. have faced up to 29% tariffs, severely affecting textile, leather, surgical, and chemical sectors. While exports to the U.S. totaled over $5.9 billion in FY24, these duties slashed competitiveness.

2. Pakistan’s Trade Surplus – A Trigger

Pakistan reported a $3 billion trade surplus with the U.S. last year. Ironically, this became a sticking point, triggering tariff reviews under Trump-era policies that remain today.

3. Strategic U.S. Investment in Focus

Talks now focus on:

• Reducing duties on Pakistani goods
• Increasing U.S. crude oil imports to Pakistan
• Joint investment in mining, especially Reko Diq
• Long-term partnership in infrastructure and finance

Key Projects – Reko Diq & Mining Investments

What Is Reko Diq?

Reko Diq is a $7 billion gold and copper mining project in Balochistan, Pakistan. It’s one of the world’s largest undeveloped mineral sites.

U.S. Export–Import Bank Support

The U.S. Exim Bank may finance up to $1 billion for the Reko Diq project. This would:

• Reduce Pakistan’s financing burden
• Bring U.S. mining companies into Pakistani soil
• Boost job creation and foreign direct investment (FDI)

Economic Impact – What Pakistan Gains

Tariff Reduction = Export Boom

Lower tariffs mean:

• More Pakistani textiles, cotton, leather, and sports goods in U.S. stores
• Reopening of closed factories
• Creation of thousands of jobs in Sialkot, Faisalabad, and Karachi

Energy Stability via U.S. Crude

U.S. oil imports will:

• Strengthen Pakistan’s energy security
• Lower electricity prices
• Reduce dependency on Gulf states

Currency and Reserves Stability

U.S. investment will support:

• Pakistani rupee stabilization
• Foreign reserves rise
• Less pressure on IMF bailouts

Challenges Pakistan Must Watch

1. Delayed Funding: Bureaucracy can delay U.S. aid or financing packages
2. Regulatory Barriers: Pakistan must ensure transparency to attract investors
3. Environmental Concerns: Mining laws need to protect local ecosystems
4. Political Instability: Investors need long-term government assurances

What’s Next – Timeline & Policy Changes