Pak sees US tariffs as window of opportunity for negotiations with the US

Sharif said that the government's intention was to formulate and present a well-structured package to the US administration and the recommendations are expected to be finalised in the coming days

Prime Minister Shehbaz Sharif set up two committees to tackle the economic implication of the new tariffs imposed by US President Donald Trump, Finance Minister Muhammad Aurangzeb said on Saturday.

The two bodies include a steering committee chaired by the finance minister and comprising ministers, prominent business leaders, secretaries, and academics, while the second was a working group led by the secretary of commerce.

You should never let a good crisis go to waste, Aurangzeb told a press conference here and explained that while the situation created immediate challenges, it also would open doors for negotiation and long-term engagement.

He said that the government's intention was to formulate and present a well-structured package to the US administration and the recommendations are expected to be finalised in the coming days and submitted to the prime minister for approval.

He said that following that approval, a high-level delegation will travel to Washington to convey Pakistan's position and further dialogue with US officials.

The minister said that Pakistan was constructively engaged with the US and hoped to strengthen the relationship through strategic discussions before the upcoming April 9 deadline for operationalisation of tariffs.

The Trump administration has imposed a staggering 29 per cent tariff on imports from Pakistan. The country may suffer as the US remains its top export destination, experts said.

We want to make sure that we, in terms of our representations, put forward how we see it in the medium to long term as a win-win situation for both Pakistan and the US, Aurangzeb said.

According to the State Bank of Pakistan, total exports to the US during the fiscal year 2023-24 amounted to $5.44 billion.

The finance minister also said that the country achieved macroeconomic stability and needed export and productivity-led growth for sustainable development.

Pakistan has achieved macroeconomic stability. We cannot squander this opportunity and have to change the DNA of the economy, he said and emphasised that there should be exports in each sector.

The finance minister expressed satisfaction that the auto sector began exporting cars in the last two months, noting that the inflation came down to 0.7 per cent last month, which was the lowest in six decades.

Our effort to ensure that the benefit of low inflation rate reaches the common man, he said.

He highlighted a 14 per cent increase in cement production and a 40 per cent increase in car sales, along with a 30 per cent rise in motorcycle sales during the first half of the year.

He expressed satisfaction over the tax collection and said the tax to GDP ratio would reach 10.6 per cent by the end of this fiscal year, showing an increase of 1.8 per cent in one year, and vowed that the tax to GDP ratio would be gradually increased to 13.5 per cent.

He also said that the government was deepening the tax base.

Aurangzeb said there was a rise in foreign exchange reserves on the back of very strong remittances and stated that the foreign exchange reserves would surpass $13 billion by June this year.

Aurangzeb reiterated that the ongoing $7 billion loan by the International Monetary Fund (IMF) would be the last programme and the government was undertaking structural reforms to put the country on the path to sustainable development.