By Staff Reporter
KARACHI: Pakistan plans to sharply increase imports of cotton and soybean from the United States to cut its bilateral trade surplus in half and sidestep steep tariffs imposed by President Donald Trump, Bloomberg reported on Wednesday.
The country aims to shrink its trade surplus with the US to below $2 billion from about $4 billion in the fiscal year ended June. The move follows Trump’s decision this month to levy a 10% tariff on global imports, plus an additional 29% on Pakistan and other surplus-running trade partners. A 90-day suspension of these extra duties, announced last week, gives Islamabad a brief window to negotiate.
Pakistan, the second-largest buyer of US cotton by value after China, depends on the US as its top export market for garments and textiles. To tackle the imbalance, the government will send a senior delegation to the US in the coming weeks to strengthen trade ties and seek tariff relief.
“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.
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.”
Beyond cotton and soybean, Pakistan is also weighing imports of Texas crude oil, though high freight costs have stalled internal agreement, Reuters reported a day earlier.
“It is one of the products being reviewed ahead of a delegation leaving for the U.S. to talk about tariffs,” a government source told Reuters. “It is under active consideration. We are exploring opportunities and the structure to do it, but the PM has to approve it.”
The refinery executive said the idea is to buy U.S. crude equivalent to Pakistan’s current imports of oil and refined products, or about $1 billion of oil.
Pakistan imported 137,000 barrels per day of crude in 2024, mostly light grades from the Middle East, with Saudi Arabia and the United Arab Emirates among its top suppliers, data from analytics firm Kpler showed. Oil imports amounted to $5.1 billion in 2024, data from Pakistan’s central bank showed.
In February, Saudi Arabia, through the Saudi Fund for Development (SFD), extended a $1.2 billion financing facility to Pakistan for the import of oil products for a year. The SFD has provided approximately $6.7 billion to Islamabad for oil products since 2019.
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