US-Pakistan Reach Trade and Energy Deal to Boost Ties

The United States and Pakistan have finalised a new agreement aimed at improving trade relations and launching energy sector collaboration, including joint efforts to explore Pakistan’s oil reserves.

The deal, confirmed by both nations on social media, comes after weeks of diplomatic meetings. US President Donald Trump stated that an oil company was being selected to lead the joint venture for developing Pakistan’s vast oil resources. While he didn’t share further specifics, the announcement marked a significant shift in Washington’s economic approach toward Islamabad.

Although Trump did not mention tariffs, Pakistan’s finance ministry revealed on Thursday that the agreement includes reduced reciprocal duties, particularly benefiting Pakistani exports to the US. However, no tariff details were disclosed.

The ministry said the deal signified a broader economic partnership, extending into areas like energy, cryptocurrency, information technology, and mining. Pakistan had previously faced up to 29% tariffs on exports due to a policy shift announced by the US in April. These measures were suspended temporarily to allow room for negotiations.

Last week, Foreign Minister Ishaq Dar described the trade talks as nearing conclusion after his meeting with US Secretary of State Marco Rubio. The two discussed expanding cooperation in key mineral and mining sectors.

Trade between the two countries amounted to $7.3 billion in 2024, up from $6.9 billion in 2023. The US goods trade deficit with Pakistan increased by 5.2% to reach $3 billion, according to official data.

The US continues to build alliances in Asia to balance China’s growing regional influence. Pakistan, already a major non-NATO ally, has seen growing engagement from Washington in recent months.

Meanwhile, the US has imposed a 25% tariff on imports from India, as talks with New Delhi remain unresolved. Pakistan, in contrast, acknowledged Washington’s role in helping ease recent tensions with India following violent border exchanges in May.