• Rate is second-lowest among South Asian nations; PSX surges even as world markets teeter
• Aurangzeb calls it ‘win-win situation’; Schehzad hopeful of investment in oil, energy sectors
• Brazil receives whopping 50pc, Canada hit with 35pc tariff; India and China ‘still negotiating’
• USTR says Trump has tariff authority, all deals contingent on countries ‘opening their markets’

WASHINGTON / ISLAMABAD: World markets teetered on Friday after US President Donald Trump unveiled tariffs on around 70 trading partners, ahead of a self-imposed deadline.

While Pakistan celebrated the 19pc tariff for its goods — the second lowest among South Asian nations — and the Pakistan Stock Exchange surged, other countries were not so fortunate.

India was still engaged in trade talks after being singled out for harsher conditions than its major peers. Afghanistan got hit with a 15pc levy; Bangladesh, Sri Lanka and Vietnam with 20pc; and India with 25pc.

Meanwhile, Brazil, Canada and Switzerland led the tariff list, with a rate of 50pc, 35pc and 39pc, respectively.

But Trump’s announcement did not cover export giant China, which is currently in negotiations on a trade deal ahead of an August 12 deadline.

In a minor reprieve that opens the door to further negotiations, the White House said the measures will take effect in a week for most countries, not Friday as previously expected.

Late on Wednesday night, a Pakistani delegation led by Finance Minister Muhammad Aurangzeb finalised a trade agreement with the US, although no figure was announced at the time.

In a Truth Social post from a couple of days ago, Trump had also said Washington would help Islamabad develop “massive oil deposits”.

A statement issued by the Finance Ministry on Friday said the decision “reflects a balanced and forward-looking approach by the US authorities, keeping Pakistan competitive relative to other South and Southeast Asian countries.”

In particular, this tariff level is expected to support Pakistan’s export potential, especially in key sectors such as textiles, which remain the backbone of the country’s export economy, it said.

The ministry said the current tariff arrangement presented a significant opportunity to expand Pakistan’s footprint in the US market and called on exporters and trade bodies to capitalise on this development.

The statement pointed to potential for growth in multiple sectors, including textiles, and expressed the government’s commitment to facilitate exporters “through policy support, market intelligence, and trade promotion initiatives”.

“Pakistan looks forward to further positive engagements and close cooperation with the United States in the areas of investment, artificial intelligence, cryptocurrency, mines & minerals, energy, and other emerging sectors,” it said.

‘Win-win situation’

In a recorded video statement, Aurangzeb said he and his team had a “very constructive final round of discussions” with US Commerce Secretary Howard Lutnick and Trade Representative (USTR) Jamieson Greer, which the “led to finalising the trade deal”.

“Trade and investment have to go hand in hand,” the finance czar stressed, adding that the “bilateral and strategic partnership has come up prominently”.

Giving insights on the process, the minister pointed out the private sector’s role as it was the “first constituent” to volunteer in helping to reduce the trade imbalance.

Terming it a “win-win situation” again for the future, Aurangzeb said: “I think we are in a good place today […] in terms of where we have arrived before August 1.”

Adviser to the Finance Minister Khurram Schehzad highlighted on X: “Pakistan is possibly the only country which the US has offered its investments as well, besides a competitive trade deal.”

He noted the “deal signals a strategic deepening of economic ties and shared growth”.

Speaking to Geo News, Schehzad expanded upon possible US investment in Pakistan’s energy sector, which he termed the “biggest area” in the economy.

“We need global partnerships in energy. We import 80-90pc of all our energy needs,” he observed.

“If such an economy — a giant which has expertise in oil and gas — if they’re coming and talking about massively building oil and gas reserves, so we can export to the entire region, not just fulfil our own needs, this is a big development,” the adviser emphasised.

“If Pakistan make a deal with the US to set up big plants for exploration or machinery, we’ll get benefits in tariffs through that as well,” he added.

“The way Pakistan has been treated compared to different countries in this region, very encouraging and important,” Schehzad said, referring to the higher 25pc levy imposed on India.

While noting that the government’s role was to negotiate and secure a good deal, he called on the private sector to execute it through business-to-business, export contracts, and export engagement.

“The import bill can be reduced, the dollar can be impacted, overall employment generation, and GDP can be improved,” Schehzad highlighted.

He pointed out that the Pakistani companies, such as Oil and Gas Development Company Limited (OGDCL) and the Pakistan Petroleum Limited (PPL), were stakeholders in Balochistan’s Reko Diq.

Trump ‘has tariff authority’

Meanwhile, USTR Jamieson Greer, in an interview to CNBC, said that the trade deals are all “premised” on other countries “actually opening their market, [and] making the investment and purchase commitments they’ve agreed to.”

If they don’t honour their agreements with the US, then “the president has his tariff authority,” Greer said.

He said that his office monitors compliance with trade deals, and if countries don’t comply they “can have the tariffs go back into place.”

“This is basic trade enforcement,” Greer said on CNBC.

Markets teeter

Equities went into retreat at the end of the week as traders contemplated the impact on the global economy.

Tokyo, Hong Kong, Sydney, Singapore, Shanghai, Mumbai, Bangkok, Wellington and Taipei were all down.

Seoul dived nearly four percent as the South Korean government considers higher taxes on corporations and stock investors to shore up revenue.

London, Paris and Frankfurt also fell, but there were gains in Manila and Jakarta.

The losses tracked a sell-off on Washington, where traders’ hopes for a September interest rate cut were dented by data showing the Federal Reserve preferred gauge of inflation rose more than expected last month.

With input from Reuters and our correspondent in Washington

Published in Dawn, August 2nd, 2025