Pakistan, US clinch landmark trade deal on tariffs, oil reserves
In yet another major diplomatic win for Pakistan, US President Donald Trump has confirmed the finalisation of a trade agreement between the two countries, a move that signals growing trust and deepening economic ties between Islamabad and Washington.
The announcement comes as India, still scrambling to finalise a trade deal with Washington, finds itself under growing pressure, staring down hefty 25% tariffs and the risk of penalties over its continued energy ties with Russia.
“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 wrote on social media.
“We are in the process of choosing the Oil Company that will lead this Partnership.”
According to the Ministry of Finance, the breakthrough came during Finance Minister Muhammad Aurangzeb’s meeting with the US Secretary of Commerce and Trade Representative. Pakistan’s Ambassador to the US, Rizwan Saeed Sheikh, and Commerce Secretary Jawad Paul were also present.
“The purpose of the deal is to boost bilateral trade, improve market access, attract investment, and strengthen cooperation in areas of mutual interest,” the official statement said.
“Under the agreement, there will be a reduction in tariffs, particularly on Pakistani exports to the US, and a fresh start in economic cooperation between the two countries.
“The two sides will focus on energy, minerals, information technology, cryptocurrency, and other key areas, the statement added.
It added that the agreement would help grow Pakistan’s trade ties with the US and improve access to each other’s markets. “It is also expected to draw more US investment into Pakistan’s infrastructure and development projects.”
Aurangzeb says broader partnership taking shape
Finance Minister Senator Muhammad Aurangzeb told Geo News that Pakistan and the United States had agreed to move trade and investment hand in hand, following a key meeting in Washington.
Speaking after talks with US Commerce Secretary Howard Lutting and Trade Representative Jameson Greer, Aurangzeb described the meeting as constructive and said the two sides finalised the trade agreement during the discussion.
“This deal reflects a broader economic and strategic partnership that’s now taking shape,” he said.
The minister thanked all those involved in the negotiations, saying the private sector had played a vital role and would continue to be supported, especially in helping to reduce the trade imbalance.
US total goods trade with Pakistan was an estimated $7.3 billion in 2024, according to the website of the Office of the US Trade Representative, up from around $6.9 billion in 2023. The US goods trade deficit with Pakistan was $3 billion in 2024, a 5.2% increase over 2023.
Dar says it’s a done deal
Meanwhile, DPM Dar broke the news in a late-night post on X, declaring: “Pakistan concludes deal with USA, AlhamdoLilah.” His announcement capped off what officials are calling a breakthrough moment in Pakistan’s economic diplomacy.
Last week, Deputy Prime Minister and Foreign Minister Ishaq Dar said the United States and Pakistan were “very close” to a trade deal that could come within days, after he met with Secretary of State Marco Rubio on Friday.
The US State Department and Pakistan’s foreign ministry, in separate statements after Rubio meets with Dar, said last week the two top diplomats stressed in their discussion the importance of expanding trade and ties in critical minerals and mining.
“Our teams have been here in Washington discussing, having virtual meetings, and a committee has been tasked by the prime minister to fine-tune now,” Dar said last week about US-Pakistan talks.
Trump also said Washington was still negotiating with Pakistan’s rival India on trade after announcing earlier in the day that the US would impose a 25% tariff on goods imported from India starting on Friday.
Pakistan has also recently said it “appreciated the pivotal role” of Trump and Rubio in de-escalating tensions between Pakistan and India by facilitating a ceasefire.”
Trump has repeatedly taken credit for the India-Pakistan ceasefire he announced on social media on May 10 after Washington held talks with both sides. India disputes Trump’s claims that the ceasefire resulted from his intervention and trade threats.
India’s position is that New Delhi and Islamabad must resolve problems directly with no outside involvement.
The latest escalation in the decades-old rivalry was triggered by a deadly April 22 militant attack in Indian Illegally Occupied Jammu and Kashmir (IIOJK) that India blamed on Pakistan. Islamabad denied responsibility. India struck Pakistan on May 7, and the two nations fought until the ceasefire was declared on May 10.
