Pakistan, U.S. back at the table on Reciprocal Trade Agreement

July 10, 2026 (MLN): Pakistan and the United States are holding a fresh round of negotiations on the Agreement on Reciprocal Trade (ART) in Washington, as the two sides work to convert last year's tariff understanding into a formal, long-term trade framework.

Foreign Office Spokesperson Tahir Andrabi said Secretary Commerce Jawad Paul is leading the Pakistani delegation, according to media reports.

The talks aim to further strengthen Pakistan-US trade relations, facilitate bilateral trade as a driver of economic cooperation, and pave the way for the diversification and expansion of existing trade.

The current round builds on a process that has moved in fits and starts since April 2025, when President Donald Trump's "Liberation Day" tariff regime set an average tariff rate of 29% on Pakistani exports to the US, placing Pakistani textiles and agricultural goods alongside steep duties slapped on regional competitors such as Bangladesh and Sri Lanka.

Islamabad and Washington reached an initial trade arrangement in the delegation on a August 1, 2025 deadline.

That deal cut Pakistan's rate to 19% from proposed 29%, one of the more favourable outcomes among dozens of countries hit with reciprocal tariffs, and left Pakistan with a lower rate than India's 25%, Bangladesh's 20% and Iraq's 35%.

The framework also opened cooperation beyond tariffs, with President Trump’s publicly confirming an energy partnership built around joint development of Pakistan's oil reserves, and secondary provisions covering mining, IT, cryptocurrency and digital infrastructure.

Momentum, however, was not linear.

Talks paused after the initial deal, and the dialogue, originally launched in July last year, was interrupted once the US imposed tariffs on imports from several countries, before resuming this week.

In the interim, Commerce Minister Jam Kamal Khan and Secretary Paul held a virtual session in May 2026 with Deputy US Trade Representative Rick Switzer, where both sides agreed a reciprocal, forward-looking framework would support sustainable economic engagement.

That round also touched on digital trade and regulatory cooperation.

The Washington round also comes as the US Trade Representative has proposed a new tariff regime of 10-12.5% targeting 60 trading partners deemed to have failed to enforce a forced-labor import prohibition regime.

The proposal, coming ahead of the expiry of a temporary 150-day global tariff on July 24, 2026 following a Supreme Court ruling that had annulled the earlier reciprocal tariffs, would place 16 countries including Pakistan, Bangladesh, Canada, Mexico, the UK and the EU at a 10% levy, while 44 other economies, including China and India, would face 12.5%.

This week's in-person session in Washington is being read as the next step toward locking in a durable tariff arrangement rather than the year-long cycle of temporary relief and renegotiation that has defined Pak-US trade talks since April 2025.

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