Pakistan is likely to buy more cotton and soybean from the United States (US) in an attempt to halve its bilateral trade surplus and escape tariffs imposed by US President Donald Trump, according to a Bloomberg report on Wednesday.
Trump ignited a potentially ruinous trade war earlier this month, as he slapped sweeping 10% tariffs on imports from around the world and harsh additional levies on key trading partners.
Pakistan faces a 29% tariff due to a trade surplus, although that is subject to the 90-day pause Trump announced last week.
Islamabad is yet to reveal its official policy to deal with the reciprocal tariff, but has announced to send a high-level delegation to the US to promote trade relations and hold talks on the tariff.
Bloomberg on Wednesday reported that Pakistan was mulling on an option to reduce the bilateral trade surplus to below $2 billion from about $4 billion in the financial year ended June.
Pakistan is already the second-largest buyer of US cotton by value after China and mainly sells garments and textiles to America, which is its largest export market, according to the report.
“Deliberations are ongoing and any offer presented during formal negotiations with the US could change,” people with knowledge of the matter told Bloomberg.
“They added that purchases of Texas crude oil had also been considered as an option but there isn’t a consensus in the government due to high freight costs,” the report said.
The office of Pakistan’s Prime Minister Shehbaz Sharif didn’t immediately respond to a request for a comment, it added.
A strategy report was presented to Sharif on April 9, the Prime Minister’s House (PMO) had previously said in a statement.
“We will try to bring high tariff lines down through negotiations because US is a big market for Pakistan,” Commerce Minister Jam Kamal Khan told Bloomberg last week. “We are optimistic.”
Meanwhile, Reuters, citing sources, on Tuesday reported that Islamabad was considering importing crude oil from the US for the first time to offset the trade imbalance that triggered higher US tariffs.
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