Aurangzeb upbeat about reversal of US tariffs
- Finance Minister says challenge with the US is not about tariffs but rather trade imbalance
KARACHI: Finance Minister Muhammad Aurangzeb on Wednesday appeared optimistic on the reversal of 29 percent reciprocal tariff imposed by United States. Speaking at a press briefing at Federation house, Federal Finance Minister Muhammad Aurangzeb said that Pakistan would soon send a high-powered delegation to the United States to discuss tariffs and trade issues.
The federal minister emphasized that the current challenge with the US is not about tariffs but rather trade imbalance.
“The current trade relationship with the United States shows Pakistan exporting goods worth $5 billion while importing only $2.1 billion,” Aurangzeb stated. “This delegation aims to address this trade imbalance by incorporating soybean, cotton, and another sector to create better trade equilibrium.”
Trump tariffs: Pakistan to boost US imports, investments, Aurangzeb tells Bloomberg
The finance minister also shared positive news regarding electricity prices, noting that power tariffs have already decreased and further reductions will be announced in July, 2025.
No Tax Exemptions in Upcoming Budget
Aurangzeb made it clear that the upcoming budget will not provide exemptions to any sector. “Everyone must pay taxes,” he declared. He noted that salaried individuals currently contribute 70% of income tax revenue, and promised that the new budget will provide relief to this class.
Aurangzeb also highlighted that during his recent visit to the United States, he participated in over 70 important meetings including discussions with the International Monetary Fund (IMF), World Bank, China, and Saudi Arabia. “All these institutions have acknowledged macroeconomic improvements in Pakistan’s economy,” he stated.
Pakistan’s foreign exchange reserves have now reached $14 billion, and the current account is expected to remain in surplus.
The Monetary Policy Committee is scheduled to meet on May 5 to decide further reduction in the interest rates.
He said the current 24th IMF program would be the final one for Pakistan.
He also emphasized the importance of various sectors to the national economy, noting that the textile industry remains the most crucial, while IT, agriculture, pharmaceuticals, furniture, and the auto sector are also contributing to exports.
“Pakistan’s IT exports currently stand at $3.2 billion, with potential to reach $8 billion in the coming years,” Aurangzeb said.
He also mentioned ongoing discussions with the Exim Bank and other financial institutions regarding the Reko Diq mining project, which has an annual potential of $2.8 billion.
Furthermore, he said that they were working on web 3.0 and Blockchain technology and the legal framework is this regards in progress.
Commenting on the closure of transit corridor to central Asia for India, he said that the war is not in favor of any country and such measures would definitely hunt Indian transit trade.
Earlier, the FPCCI acting President Saqib Fayyaz questioned why interest rates weren’t being reduced further despite positive economic indicators.
“Why aren’t interest rates decreasing more? Is maintaining the current rate necessary to balance economic growth and payments?”
Saqib emphasized challenges faced by exporters since being removed from the fixed tax regime in the previous budget.
“The export sector has been negatively impacted by the normal tax regime.
Additional taxes are actually reducing tax collection rather than increasing it, and we’re seeing issues with fake invoices,“ he said.
The FPCCI leader praised the government and SIFC for their efforts, noting that exports had grown by 7.7 percent to $24.6 billion in the first nine months of fiscal year 2025. However, he pointed out that the trade deficit had increased by 4.5 percent.
“We’re grateful to overseas Pakistanis who have helped manage this deficit by sending $28 billion in remittances,” he said, suggesting that “the upcoming budget should include a special package for overseas Pakistanis.”
Meanwhile, Asif Sakhi, vice president urged the prime minister and chairman FBR to conduct forensic audit of the five-month progress of faceless assessment system (FAS. He suggested to carry out revenue evaluation of 50% percent green channel clearance under the FAS.
Copyright Business Recorder, 2025