The government is set to send a high-level delegation to the United States to promote trade relations and discuss a 29 per cent tariff that has been imposed on goods the US imports from Pakistan, the Prime Minister’s Office (PMO) said on Wednesday.
As the US imposed heavy levies on dozens of allies and rivals alike on April 2, Pakistan was hit by a 29pc tariff on goods it exports to the US, which economists say could bring immediate hurdles but also long-term opportunities.
According to a press release issued by the PMO, the decision to send a delegation was made during a meeting chaired by PM Shehbaz Sharif in Islamabad today to discuss the trade tariff imposed by the US.
“On the directives of the prime minister, the delegation will also include renowned business persons and exporters,” the statement said, without specifying which government officials would be part of the team.
“The delegation has been tasked by the prime minister to work out a mutually beneficial course of action for the future after negotiations on the new tariffs imposed by the US on imports,” the PMO said.
“Trade relations between Pakistan and America span decades,” PM Shehbaz was quoted as saying in the statement.
“The government is keen to further strengthen trade partnership with the US,” the premier added.
During the meeting, the prime minister was presented with a report by the Steering Committee and Working Group on the tariff imposed by the US and the proposed future course of action, the PMO statement said.
Various alternative courses of action were also presented during the meeting.
The meeting was told that Pakistan’s Embassy in the US was in “constant” contact with the Trump administration.
Deputy PM Ishaq Dar, Finance Minister Muhammad Aurangzeb, Special Assistant to PM Tariq Fatemi, among others, were present during the meeting, according to the statement.
The development comes as the Pakistan Stock Exchange (PSX) earlier today declined by over 2,600 points, as additional US tariffs on Chinese imports reached 104pc.
This followed Monday’s bloodbath at the PSX when shares plunged by 3,882 points amid rising fears of a global recession after US President Donald Trump imposed “reciprocal” tariffs on dozens of rivals and allies alike.
Meanwhile, a US official conveyed the interest of US companies to invest in the country’s mineral sector, state-run Radio Pakistan reported.
A US delegation led by Eric Meyer, a senior bureau official (SBO) for the Bureau of South and Central Asian Affairs at the US State Department, met with PM Shehbaz in Islamabad today.
During the meeting, PM Shehbaz expressed Pakistan’s desire to work with Trump and his administration to strengthen bilateral relations, the report said.
Meyer congratulated Pakistan on successfully hosting the Pakistan Minerals Investment Forum, held from April 8-9 in Islamabad.
“He acknowledged the potential of Pakistan’s mineral sector and conveyed the interest of US companies to invest in the sector,” Radio Pakistan stated.
He also expressed the US’s desire to work with Pakistan on issues of shared interest and said his country looked forward to enhancing bilateral ties with Pakistan, according to the report.
The prime minister also welcomed US participation at the investment forum. He emphasised that the minerals sector of Pakistan presented immense opportunities and encouraged US companies to invest in this priority sector, according to Radio Pakistan.
It further said the premier underscored the importance of enhanced cooperation in areas of mutual interest, including trade, investment and counterterrorism.
He highlighted the significance of Pakistan-US relations not only in the bilateral context but also for regional peace and security, the report added.
China seeks to ‘tariff-proof’ economy as trade war deepens
China is trying to tariff-proof its economy by boosting consumption and investing in key industries, but analysts say it remains critically vulnerable to the economic storm triggered by Donald Trump’s 104pc levies on its goods.
Beijing has vowed to “fight to the end” against Trump’s aggressive trade policy, with number two leader Li Qiang saying authorities were “fully confident” in the resilience of the Chinese economy.
But even before the tariffs hit, weakness in the post-Covid domestic market, rising unemployment and a long-running property crisis had all dampened consumption.
“The Chinese economy has been significantly weakened since Trump’s first term and can’t really withstand the impact of sustained high tariffs,” said Henry Gao, an expert on the Chinese economy and international trade law.
Overseas shipments represented a rare bright spot last year, with the United States as the top single-country buyer of Chinese goods. US figures put Chinese exports to the United States at around $440 billion in 2024, almost three times the $145bn worth of imports.
Machinery and electronics — as well as textiles, footwear, furniture and toys — make up a majority of the goods sent, and a supply glut could squeeze already crowded domestic consumer markets.
Although China’s domestic market is stronger now than in Trump’s previous term, there would inevitably be pain ahead, said Tang Yao from Peking University’s Guanghua School of Management.
“Certain products are specifically designed for American or European markets, so efforts to redirect them to domestic consumers will have only a limited effect,” he said.
‘Strategic opportunity’
However, a weekend editorial in the Communist Party-backed People’s Daily described the tariffs as a “strategic opportunity” for China to cement consumption as the main driver of economic growth.
We must “turn pressure into motivation”, it read.
Beijing has been seeking to “recast structural external pressure as a catalyst for long-intended reforms”, said Lizzi Lee from the Asia Society Policy Institute’s Center for China Analysis. Authorities are “projecting confidence”, she said.
China’s quick and coordinated response to tariffs reflects lessons learned from Trump’s first term, she added.
For example, in addition to readying reciprocal tariffs on US goods set to come into effect on Thursday, Beijing’s commerce ministry the same day announced export controls on seven rare earth elements — including ones used in magnetic imaging and consumer electronics.
Beijing’s response to any further escalation may no longer be confined to tit-for-tat levies, as China is “refining its retaliatory approach”, Lee said.
Since Trump’s first term, China has diversified and fortified relationships with countries in Europe, Africa, Southeast Asia and Latin America, as well as South Korea and Japan.
Beijing could also expand government support for the private sector as entrepreneurs fall back into President Xi Jinping’s good graces, added ANZ’s Raymond Yeung.
China’s leaders have been trying to promote domestic self-reliance in technology for some time, offering explicit support and reinforcing supply chains in key areas like AI and chips.
Counting existing levies imposed in February and March, that takes the cumulative tariff increase for Chinese goods during Trump’s second presidency to 104pc.
Trump has insisted the ball was in China’s court, saying Beijing “wants to make a deal, badly, but they don’t know how to get it started”.
Late on Tuesday, Trump also said the United States would announce a major tariff on pharmaceuticals “very shortly”.
Separately, Canada said that its tariffs on certain US auto imports will come into force on Wednesday.
‘No real protection’
While this time round Beijing has more experience with Trump, it “doesn’t mean the Chinese economy can easily shake off the effects of soaring tariffs”, said Frederic Neumann, chief Asia economist at HSBC.
Authorities will be looking to quickly offset falling US demand for Chinese goods, he said.
That could look like trade-in schemes or more consumer subsidies that make it easier for Chinese shoppers to buy common household items, from water purifiers to electric vehicles.
“By creating demand and trade opportunities for China’s partners in Asia and Europe, the country could help shore up what’s left of the liberal global trading order,” Neumann said.
But whether or not Beijing can do that is yet to be seen.
The government has “been very reluctant to introduce real consumption stimulus, which is why there’s such low confidence in any so-called consumption-boosting measures”, Gao said. “I don’t think China has any real protection against a trade war,” he added.
Success also goes beyond words and ultimately hinges on Beijing’s ability to deliver the long-awaited consumption boost, HSBC’s Neumann warned.
“This is China’s moment to seize economic leadership of the world,” he said. “But that leadership will only come about if domestic demand rebounds and fills the void left by an absent US.”
