In a landmark development, Pakistan and the United States have finalised a comprehensive trade agreement aimed at reducing tariffs, expanding market access, and laying the foundation for deeper economic and strategic collaboration.
Trump Announces Oil Partnership as India Faces US Trade Pressure
US President Donald Trump announced the agreement in a social media post, confirming that Washington and Islamabad would jointly work to develop Pakistan’s extensive oil reserves. “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 stated. “We are in the process of choosing the Oil Company that will lead this partnership.”
This announcement came amid rising pressure on India, which now faces a 25% tariff on its exports to the US and a possible penalty over its continued trade ties with Russia.
Finance Minister Aurangzeb Leads Successful Negotiations
The trade breakthrough followed intense negotiations led by Pakistan’s Federal Minister for Finance Muhammad Aurangzeb, alongside the US Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. Pakistan’s Ambassador to the US, Rizwan Saeed Sheikh and Commerce Secretary Jawad Paul were also involved.
According to the Ministry of Finance, the deal includes significant tariff reductions, especially benefiting Pakistani exports. It also opens doors to joint ventures in sectors like energy, information technology, cryptocurrency, minerals, and infrastructure.
A Strategic Economic Shift Beyond Trade
Speaking to the media, Minister Aurangzeb emphasised that the agreement goes beyond short-term trade goals. “This deal reflects a broader economic and strategic partnership that’s now taking shape,” he said. “We aim to move from transactional trade to long-term cooperation.”
He added that the private sector played a critical role and would continue to be supported to address Pakistan’s trade imbalance with the US.
Pakistan Eyes US Investment in Development Projects
The finance ministry highlighted that the agreement would not only improve bilateral trade but also bring US investment into key infrastructure and development projects across Pakistan. “The agreement enhances Pakistan’s access to the US market and vice versa,” it said.
Dar and PM Shehbaz Laud Breakthrough
Deputy Prime Minister Ishaq Dar had earlier hinted that the deal was close after meeting with US Secretary of State Marco Rubio. On social media, Dar confirmed the finalisation of the agreement, calling it a breakthrough in Pakistan’s economic diplomacy.
Prime Minister Shehbaz Sharif expressed gratitude toward President Trump, stating, “This landmark deal will enhance our growing cooperation to expand the frontiers of our enduring partnership in days to come.”
India Hit with Tariffs Amid Geopolitical Shifts
In contrast, Trump announced a 25% tariff on Indian exports and hinted at further penalties due to India’s arms and energy ties with Russia and participation in BRICS, which he described as “anti-American.”
This sharp policy divergence underscores a broader geopolitical recalibration by the US, boosting ties with Pakistan while signalling discontent with India’s current foreign policy trajectory.
A New Era of Economic Engagement
With the deal now finalised, both nations are expected to initiate joint ventures in energy, digital infrastructure, and critical minerals. According to officials, the oil partnership could serve as a catalyst for deeper cooperation in strategic sectors.
The agreement also marks a dramatic shift from earlier tensions, with US-Pakistan trade now poised for growth after a 5.2% increase in bilateral trade in 2024, bringing the total to $7.3 billion.
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