Roads of Karachi, Pakistan, dated 2022
Muhammad Aqib | Moment | Getty Images
Countries around the world have been feeling the pressure of tariffs imposed on their exports to the U.S., as well as the trade tensions between the world’s largest superpowers.
Pakistan is no exception.
U.S. President Donald Trump had imposed a 29% duty on all exports from the South Asian country to the U.S. on April 2. He has since lowered the duty to 10%, as part of his 90-day pause on tariffs imposed on some countries and goods.
The weighted average tariff on U.S. exports to Pakistan is around 7%, Pakistan’s Federal Minister for Finance & Revenue, Muhammad Aurangzeb says. Conversely, the weighted average tariff on U.S.’ imports from Pakistan is around 10%, he noted.
“We export a little over $5 billion (and) import roughly $2 billion plus,” Aurangzeb told CNBC on the sidelines of the IMF-World Bank Spring Meetings.
He added that Pakistan is now looking to engage with the U.S. to “close this gap.”
The country’s imports from the U.S. include “high quality cotton,” as well as other agriculture commodities such as soy beans, the minister noted. Going forward, he reckons that trade between both countries could include metals such as copper, which Pakistan produces.
“From Pakistan’s perspective, the U.S. has been a very strategic partner – one of our largest trading partners. Therefore, we want to, very constructively engage with the U.S.,” Aurangzeb said.
U.S. or China?
When asked if Pakistan has plans to pivot more towards China, the finance minister responded that the South Asian nation is not inclined to choose one country over the other.
“From where I sit and where the government is … both are very critical and strategic allies for Pakistan.”
Touching on China, Aurangzeb noted that it has a “longstanding relationship” with Pakistan.
For instance, Pakistan has been active in China’s signature belt and road initiative which involves the construction of multi-billion dollar infrastructure projects across countries.
A key project in the initiative is the China-Pakistan Economic Corridor which has seen China investing over $65 billion in Pakistan, including in the Gwadar port which provides China’s western Xinjiang region a gateway to the Arabian Sea.