Pakistan and the United States signed a major trade agreement today, signaling a new era of economic cooperation. The deal will reduce tariffs, increase investment, and improve market access for both countries.
The agreement was finalized during a meeting in Washington D.C. between Pakistan’s Finance Minister, Senator Muhammad Aurangzeb, and US Secretary of Commerce Howard Lutnick. Ambassador Jamieson Greer, the United States Trade Representative, also attended. Secretary Commerce Jawad Paul and Ambassador Rizwan Saeed Sheikh were part of the Pakistani delegation.
Former US President Donald Trump announced the deal on his platform, Truth Social, calling it a “historic move for mutual growth.”
Lower Tariffs, Bigger Exports
The deal cuts tariffs on over 250 product categories. Pakistani exporters will benefit the most in textiles, leather goods, surgical tools, and food items like rice and mangoes. In return, US companies gain easier entry into Pakistani markets for agriculture tech, pharmaceuticals, and medical equipment.
Finance Ministry estimates suggest a $2.5 billion increase in Pakistani exports to the US over the next two years.
“Our exporters now have a real shot at competing in the US,” said Finance Minister Aurangzeb. “This deal removes long-standing trade barriers and opens valuable opportunities.”
Investment Flows Into Key Sectors
The agreement includes investment commitments in energy, minerals, IT, and cryptocurrency. US firms plan to explore joint ventures in these areas through a new initiative called the Pakistan-US Economic Growth Framework.
Commerce Secretary Howard Lutnick highlighted Pakistan’s role in global energy and digital markets. “We see Pakistan as a partner in building the future of clean energy and tech innovation,” he said.
This framework encourages venture capital investment and technical collaboration between American and Pakistani companies.
State-Level Partnerships in the US
The deal also introduces a new approach: direct cooperation with individual US states. Pakistan is working with Texas, California, and Ohio to set up trade and education programs. These partnerships aim to bypass federal bottlenecks and accelerate bilateral projects.
Ambassador Rizwan Saeed Sheikh stated, “By working directly with US states, we unlock a wider range of economic possibilities.”
Diplomatic Win for Both Sides
This agreement comes after over a year of intense negotiations. Trade officials resolved key differences around regulatory standards and digital trade policies in recent meetings.
Both countries view this deal as a foundation for broader cooperation. “This is not just about trade. It’s about a long-term partnership based on shared goals,” said Ambassador Jamieson Greer.
The agreement shifts the focus from foreign aid to economic collaboration and business-led growth.
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Key Features of the Deal
- Tariff Relief: Immediate tariff cuts on major Pakistani exports such as textiles and rice
- Investment Pathways: A bilateral task force will help launch joint ventures
- Tech Transfer: US experts will work with Pakistani firms in blockchain and AI
- Crypto Policy: Pakistan will create clear rules for digital assets with US guidance
- Market Access: US firms will benefit from reduced regulatory barriers in Pakistan
Reactions from Business and Industry
Leaders from Pakistan’s textile and surgical instruments industries welcomed the deal. Faisalabad’s textile exporters expect a surge in orders by Q4 2025.
The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) praised the agreement. “This is a practical step toward long-term export growth,” said an FPCCI spokesperson.
Economists believe the deal can stabilize Pakistan’s external accounts and boost investor confidence.
Dr. Zubair Safdar, an economist at LUMS, explained, “This agreement gives Pakistan access, credibility, and capital. It’s what the economy needs right now.”
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Next Steps
The trade agreement will take effect on September 1, 2025, after formal ratification. A follow-up meeting of the Pakistan-US Economic Council is scheduled for October.
US business leaders will visit Lahore and Karachi later this year. The visit will explore investment opportunities and finalize pilot projects in energy and digital finance.
Pakistan also plans to host a US-Pakistan Innovation Summit in early 2026 to promote start-up funding and cross-border R&D.
