Pakistan and the US Finalize Major Trade Deal
ISLAMABAD – Pakistan and the United States have signed a big trade deal that will help both countries work closely in energy, mining, IT, cryptocurrency, and more.
The deal was announced after final talks in Washington. Pakistan’s Finance Minister, Muhammad Aurangzeb, led the negotiations and said this is more than just a trade agreement — it is also a step towards a bigger economic and strategic partnership with the US.
“This agreement is not just about trade,” Aurangzeb said. “It’s about bringing trade and investment together.”
Tariff Relief for Pakistan
Pakistan was at risk of facing a 29% US tariff. However, the US paused the tariff until August 1 to allow for trade talks. Pakistan wanted a lower rate than its competitors, like Vietnam (20%) and India (25%).
Now, with the new deal, there will be lower tariffs, especially on Pakistani exports to the US. The exact numbers are not yet public.
Pakistan’s trade surplus with the US was around $3 billion in 2024, mostly from textile exports, which are Pakistan’s biggest export to the US.
US to Help with Oil Projects
Former US President Donald Trump also announced that both countries will work together to develop Pakistan’s oil reserves.
“We have just made a deal with Pakistan to help develop their massive oil resources,” Trump said on social media. He added that they are selecting the oil company that will lead the work.
Pakistan has tried offshore oil exploration before, but has not had much success. Still, a US study in 2015 said Pakistan has 9.1 billion barrels of technically recoverable shale oil.
A Strategic Shift Away from China?
Experts say the deal could also have political importance. The US wants to reduce Pakistan’s reliance on China, especially as Pakistan has grown closer to China in recent years.
Relations between Pakistan and the US had cooled under earlier governments. But Trump worked to improve ties and even claimed credit for helping to stop a conflict between Pakistan and India in May, using the threat of trade restrictions.
Pakistan praised Trump’s efforts and even nominated him for a Nobel Peace Prize. However, India disagreed with his claims.
Oil: A Big Issue for Pakistan
Oil is Pakistan’s largest import, costing $11.3 billion in the year ending June 30, 2025. It makes up about 20% of the country’s total import bill, according to the central bank.
This new partnership with the US could help Pakistan develop its oil and reduce its import costs in the future.
Mutib Khalid is a skilled content writer and digital marketer with a knack for crafting compelling narratives and optimizing digital strategies. Excel in creating engaging content that drives results and enhances online presence. Passionate about blending creativity with data-driven approaches, Mutib Khalid helps brands connect with their audience and achieve their goals.