Islamabad (TDI): Pakistan has decided to talk with the United States and compel it to review the reciprocal trade tariffs that Trump has announced for sixty countries, including Pakistan.
The decision was reached at during a high level meeting chaired by Finance Minister Muhammad Aurungzeb. Pakistan’s representative in the World Trade Organization (WTO) and other key government functionaries were also present in the meeting.
It has been decided that Pakistan’s Ambassador to the US, Rizwan Saeed Sheikh, and Trade Minister will try to arrange a meeting with one of Trump’s trade representatives in Washington this week.
Trump has announced 29% additional tariffs on Pakistani exports, raising the tariffs on garments as high as 49%. It is important to note that garments and leather are Pakistan’s top exports to the United States.
Pakistan was not expecting its name on the list of additional reciprocal tariff countries, because it is nowhere on the top among the countries with whom Washington has a trade deficit.
Read More: Trump’s Massive Tariffs Amp Up Global Trade War
It is true that Pakistan has a $3 billion trade surplus with the US but it charges 7.3% compared to 9.9% that the US charges on imports from Pakistan.
Pakistan’s import duties on US products are mostly guided by protectionism for its local industry. There are zero duties on import of cotton from the US, 5 to 10% on meat, and about 3.25% on soybean imports.
However, tariffs on steel and iron are 20% because Pakistan seeks to protect its local steel industry, being a low-income economy with limited functional industries.
Read More: Trump Warns of Trade War ‘Pain’ for Americans
During the July-March period of this fiscal year, Pakistan exported $3.9 billion goods to the US while importing products worth $933 million. This caused a 15% increase in Pakistan’s exports to the US compared to the last year.
Trump’s trade tariffs are fueled by a desire to minimize imports, boost local purchasing, and increase revenues.
In response to the reciprocal tariffs, most countries are considering adding further reciprocal tariffs, with no end in sight for these multi-front trade wars.
Nuzhat Rana is an Associate Editor at The Diplomatic Insight.
