Pakistan Set for Lowest US Tariffs in South Asia at 19 percent

The United States has shown indications that it wants to intensify its economic cooperation with Pakistan, particularly in the area of critical minerals, hydrocarbons, and new sectors, which could potentially signal a boost to Pakistan's economic fortunes.

On Pakistan's Independence Day, in a congratulatory message, US Secretary of State Marco Rubio said, "The United States warmly welcomes Pakistan's cooperation on counterterrorism and commerce. We look forward to new fronts of economic cooperation, including hydrocarbons and critical minerals, and developing dynamic business relationships which will create a prosperous future for Americans and Pakistanis."

Pakistan is also likely to gain the lowest US tariff rates in South Asia under Washington's new plans, at a 19 percent rate compared to 50 percent for India after the additional penalties on its Russian oil imports.

Key Highlights:

US signals deeper economic cooperation with Pakistan in critical minerals, hydrocarbons, and emerging sectors
Pakistan to receive lowest US tariff rate in South Asia at 19 percent, compared to India’s 50 percent after penalties
Trump announces joint plan to develop Pakistan’s oil reserves, boosting investment prospects

The announcement is made in the backdrop of escalating US interest in Pakistan's resource wealth. In July, US President Donald Trump made a historic trade agreement announcement to co-develop Pakistan's oil reserves. "We are considering selecting the Oil Company which will spearhead this Partnership. Perhaps they will be selling Oil to India one day!" Trump said.

Also Read: India & US Backchannel Talks Persist Amid Tariff Dispute

Onlookers in Islamabad interpret the events as an indication of renewed US acceptance of Pakistan's strategic and economic importance. The partnership would unlock avenues of investment in Pakistan's underdeveloped mineral and energy industry, generating employment and infrastructure development.

Army Chief Asim Munir's recent visit to the US, his second in two months. Further reinforced high-level interaction, which seemed to indicate that economic cooperation could be supported by deeper strategic convergence between the two countries.