Aurangzeb heads to IMF, WB talks amid US tariffs concerns

Finance Minister Muhammad Aurangzeb is set to participate in the International Monetary Fund (IMF) and World Bank’s (WB) 2025 spring meetings held in Washington, United States (US). As per credible reports, Aurangzeb’s visit may also help address concerns surrounding Donald Trump’s 29 percent reciprocal tariffs against Pakistan.

Reports seem to back Pakistan’s intention to discuss the US’s trade restrictions with the Trump administration. While the trade war escalates between the US and China, Pakistan seeks to resolve the issue amicably.

A list of 75 countries, including Pakistan, have decided to respond to US tariffs by engaging in negotiations. Muhammad Aurangzeb is slated to hold meetings with key financial institutions to go over the impact of the devastating tariffs on Pakistan's economy.

The IMF and WB are expected to provide Pakistan with a framework to deal with the tariffs, as both international lenders play a pivotal role in forming Pakistan’s macroeconomic policies. Islamabad often has to look towards the IMF for their nod before making any major changes.

A recent report conducted by the Pakistan Institute of Development Economics (PIDE) revealed that US tariffs could result in Pakistan experiencing a foreign exchange inflow reduction of approximately $1.4 billion.  Moreover, a spike in the domestic unemployment rate is possible as PIDE projects that half a million workers could be fired.

Reports indicate that a slew of central bankers, experts and finance ministers will also take part in the Spring Meetings. While the tariffs remain suspended for 90 days, it would be beneficial for Pakistan to engage with the aforementioned international players and gain trading partners in case the US decides to resume tariffs again.

Diversification in Pakistan’s export destinations is vital, given that its largest single-country export destination is the US. This could help insulate Pakistan’s cash-strapped economy from international adverse shocks. 

However, many believe that it may not be feasible to find trade partners who would be able to plug the gap in exports left by the US. Earlier, analysts speculated that a high-profile delegation from Pakistan could visit Washington after the Spring Meetings conclude to normalize trade relations between both countries.

Prime Minister Shehbaz Sharif’s office has now established that a delegation is slated to visit Washington DC with Commerce Minister Jam Kamal Khan at the helm. Some believe that if Pakistan decreases the tariffs it levies on US imports, the Trump administration could reduce its rate on Pakistan.