KARACHI: Islamabad and Washington have resolved to conclude their ongoing trade negotiations on reciprocal tariffs by next week, Pakistan’s finance ministry said on Wednesday as both sides look to bolster their economic relationship. 

Pakistan last month announced it had begun talks with the United States (US) following the imposition of steep tariffs by President Donald Trump’s administration on several countries, including Pakistan. 

Washington said it had imposed the duties to correct trade imbalances and ensure fair treatment of American goods. The decision was criticized as a blow to global economic recovery efforts in the aftermath of the COVID-19 pandemic.

Pakistan has been hit with a 29 percent tariff on its exports to the US as the country tries to drive sustainable economic growth through increased exports. 

“Both sides showed satisfaction on the ongoing negotiations and resolved to conclude the trade negotiations next week,” the finance ministry said after a virtual meeting between Pakistan’s Finance Minister Muhammad Aurangzeb and US Commerce Secretary Howard Lutnick on Tuesday. 

The ministry said both sides also agreed to conclude a partnership based on strategic and investment interests, covering areas of mutual interest, “in due course.”

“The discussion focused on meaningful engagement in trade, investment and deepening economic ties mutually beneficial to both sides with technical level trade-related discussions to be concluded next week,” the ministry added. 

Islamabad attaches significant importance to its trade deal with Washington, as the US is Pakistan’s largest export market, and analysts warn that the new tariffs could undermine the South Asian country’s fragile economic recovery.

According to Pakistan’s central bank, the country exported $5.44 billion worth of goods to the US in 2024. From July 2024 to February 2025, exports stood at $4 billion, up 10 percent compared to the same period last year.

Nearly 90 percent of Pakistan’s exports to the US are textiles, a sector likely to bear the brunt of the tariff impact.

Trade experts have also cautioned that the duties could erode Pakistan’s competitiveness, especially if regional players such as China, Bangladesh and Vietnam shift focus to European markets, intensifying competition in alternative destinations.