Pakistan seeks broader U.S. trade ties beyond tariffs as delegation prepares for visit

A high-level Pakistani delegation will visit the United States to discuss trade opportunities as officials downplay concerns over a tariff imbalance between the two nations.

Speaking at the Atlantic Council, Finance minister Muhammad Aurangzeb said Pakistan’s weighted average tariff on U.S. imports stands at just over 7%, while American tariffs on Pakistani exports exceed 10%. He said the focus should shift toward broader economic collaboration rather than immediate tariff disputes.

“We don’t necessarily see the tariff imbalance as a big issue,” minister said. “We see potential in minerals and rare earth elements as a key area for future cooperation.”

Aurangzeb said a recent minerals conference in Pakistan drew a high-level U.S. delegation, with both sides eyeing opportunities in copper and rare earth metals—critical components for the global energy transition. “Pakistan’s Reko Diq mine, one of the world’s largest untapped copper reserves, has already attracted significant interest”.

“Copper is going to be a critical enabler in the energy transition, and there’s a looming global shortage,” he said. “Our mineral belt could be the supply-side answer.”

Beyond extraction, Pakistan hopes to develop downstream industries, including value-added processing, which could be a “game-changer” for its economy. U.S. investors have shown growing interest in rare earth minerals, signaling potential for deeper economic ties.

“We have something to offer in the wider scheme of things,” Aurangzeb said. “This is about looking beyond immediate tariff discussions and engaging constructively on a broader spectrum.”

Muhammad Aurangzeb said tax revenues and the tax-to-GDP ratio are expected to reach roughly 10.6% by year’s end. Last year, tax revenues rose 29%, and similar growth is anticipated this year.

He acknowledged challenges in public finance but noted some fiscal space has been created through lower policy rates and debt management savings. The National Fiscal Pact with provinces allows shared social sector spending and potential revenue-sharing, including new agricultural income taxes.

Aurangzeb highlighted partnerships with multilateral lenders, including a 10-year Country Partnership Framework focusing on climate and population issues—key concerns for Pakistan. The framework includes concessional financing and private-sector support.

On enforcement, digitalization and AI-driven audits are improving tax compliance. Aurangzeb stressed the need to expand the tax base beyond salaried workers and manufacturers, addressing trust gaps in the tax system.

Regarding climate finance, he noted past challenges in securing pledged funds due to a lack of bankable projects. However, recent deals—including a $1.3 billion IMF resilience fund and potential green bonds—offer new opportunities. A green taxonomy framework is expected by June to guide sustainable investments.

Aurangzeb emphasized execution as the critical hurdle, calling for stronger government accountability and coordination with provinces to ensure results.