Pakistan, US Reach Trade, Energy Deal; Trump Highlights Oil Pact

News Desk

Islamabad/Washington: The United States and Pakistan have finalized a bilateral agreement that Islamabad says will ease tariffs on its exports, while former President Donald Trump emphasized a separate deal aimed at tapping Pakistan’s untapped oil reserves.

The agreement follows months of negotiations after Washington initially proposed a steep 29 percent tariff on Pakistani goods in April—later paused for 90 days to allow for trade talks.

“We have just concluded a deal with the country of Pakistan, whereby Pakistan and the United States will work together on developing their massive oil reserves,” Trump announced on social media.

“We are in the process of choosing the oil company that will lead this partnership,” he added, without disclosing further details.

Pakistani Foreign Minister Ishaq Dar confirmed the conclusion of the deal to Reuters, offering no additional comment.

While Trump did not mention trade tariffs, Pakistan’s finance ministry stated that the agreement would lead to a reduction in reciprocal tariffs, particularly benefiting Pakistani exports to America. However, no figures were made public.

“This deal marks the beginning of a new era of economic collaboration, especially in energy, mines and minerals, IT, cryptocurrency, and other sectors,” the ministry said in a statement.

Pakistan’s Finance Minister Muhammad Aurangzeb, who led the final round of negotiations in Washington, described the agreement as a “win-win” for both countries.

“From our perspective, it was always going beyond the immediate trade imperative, and its whole purpose was, and is, that trade and investment have to go hand in hand,” Aurangzeb said in video remarks.

Just last week, Dar said the two countries were “very close” to a trade breakthrough following a meeting with US Secretary of State Marco Rubio. Both sides reported discussions on expanding ties in critical minerals, mining, and broader trade relations.

Under Trump, the US has consistently sought to renegotiate trade agreements and impose tariffs on what it considers unfavorable trade terms—a view many economists have contested.

According to the Office of the US Trade Representative, total goods trade between the United States and Pakistan reached an estimated $7.3 billion in 2024, up from $6.9 billion in 2023. The U.S. goods trade deficit with Pakistan grew by 5.2 percent in 2024, reaching $3 billion.

Trump also noted ongoing negotiations with India, signaling that a 25 percent tariff on Indian goods would take effect Friday.

Meanwhile, Pakistan has praised Trump and Rubio for helping “de-escalate tensions between Pakistan and India by facilitating a ceasefire” earlier this year following hostilities over a deadly militant attack in Indian-administered Kashmir on April 22, which India blamed on Pakistan. Islamabad denied any involvement.

Cross-border strikes followed until Trump announced a ceasefire on May 10, claiming US mediation had led to the breakthrough. India, however, disputes that claim, asserting that New Delhi and Islamabad must resolve their issues without third-party intervention.

The developments mark a significant turn in US-Pakistan relations, combining economic incentives with strategic energy cooperation amid ongoing regional tensions.