Finance Minister Muhammad Aurangzeb has categorically stated that Pakistan has no intention of retaliating against the 29 percent tariffs imposed by the United States.

A study conducted by Pakistan Institute for Development Economics (PIDE) titled “Impact of Unilateral Tariff Increase by the US on Pakistani Exports” noted that the tariffs would actually amount to 37.6 percent when added to the existing 8.6 percent Most Favoured Nation status granted to Pakistan with a devastating impact on our exports - 1.1 to 1.4 billion-dollar lower exports (mainly textiles) revenue.“

Aurangzeb during a recent interview acknowledged that Pakistan is concerned about the US tariffs but added that “we all need to think about how to move forward in this new world order, and I believe it is essential to engage in dialogue on this matter.”

A few days later, a Business Recorder exclusive sourced to the Ministry of Commerce maintained that “we are in contact with the Trump administration through the Pakistan Embassy in Washington regarding the issue of increased tariffs. Efforts are underway to initiate formal talks at the government level.

An official delegation led by the Commerce Secretary will depart for Washington once meetings are scheduled.“ And this week past it was reported that Aurangzeb will attend the Spring meeting of the IMF/World Bank in Washington, DC (21 to 26 April) and engage with relevant US officials on this matter.

Three obvious observations need to be highlighted. First, the US reasons for levying tariffs on Pakistan relate mainly to two ministries – Federal Board of Revenue (FBR) that comes under the administrative control of the Finance Ministry led by Aurangzeb and the Interior Ministry led by Mohsin Naqvi.

FBR related concerns identified by the US are fourfold: (i) Trade and Investment Framework Agreement (TIFA) signed in June 2003 between Pakistan and the US, the primary mechanism for discussions of trade and investment as per the US, agreed on an average MFN status applied tariff of 10.3 percent.

This is not applicable as Pakistan has bound 98.6 percent of its tariff lines to the World Trade Organization (WTO), with an........

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