Just a day after announcing a 'landmark energy partnership' with Pakistan, US President Donald Trump signed an executive order on Friday imposing a 19 per cent tariff on Pakistani goods. This new levy is part of an expanded tariff plan that Trump had announced on Thursday. The updated tariffs, which apply to imports from dozens of countries, are set to take effect in seven days, on August 7, at 12:01 a.m. Washington time.
While Pakistan was initially expected to face a steeper 29 per cent duty, the final list released by the White House on Thursday lowered the rate to 19 per cent. This reduction came after what was described as a last-minute trade deal between Washington and Islamabad.
The new tariffs come on the heels of a preliminary energy deal that Trump had previously praised. On Tuesday, he announced a 'significant beginning' to a long-term energy partnership with Pakistan, touting a joint effort to develop the country's 'massive oil reserves.' The details of these reserves remain unclear, and Trump did not mention any tariffs in his initial announcement.
As part of the deal, Pakistan agreed to shift its long-standing dependence on Middle Eastern energy suppliers and begin importing US crude oil. Trump mentioned that both countries would cooperate to tap unexplored reserves and even floated the idea of Pakistan eventually exporting oil to India. He added that the US was in the process of selecting an oil company to lead the partnership but did not provide any specific names or timelines.
The first tangible result of this deal was confirmed on Friday when Usama Qureshi, the vice chairman of Pakistan's largest refiner, Cnergyico, told Reuters that the company would import 1 million barrels of American West Texas Intermediate (WTI) crude oil from global commodity trader Vitol in October.
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The White House's new reciprocal tariff rates are part of a broader strategy to narrow trade deficits and increase government revenue. The minimum tariff rate for imports from most countries not specifically listed in the order has been set at 10 per cent. Some of the tariffs were anticipated, such as the 25 per cent levy on Indian exports that Trump had announced earlier this week. Other rates include a 20 per cent tariff on Taiwanese products and a 30 per cent tariff on South African goods.
Thailand and Cambodia, which also reportedly struck last-minute deals, received a 19 per cent duty, matching rates imposed on regional neighbours like Indonesia and the Philippines, while Vietnam's goods will be tariffed at 20 per cent. The order also specified that goods transshipped to evade higher rates would be subject to additional levies. It should be noted that certain economies, such as China, Canada, and Mexico, are governed by different trade agreements and are therefore not included in this new order.
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