Pak US conclude trade deal; US to help Pakistan develop ‘massive’ oil reserves

US President Donald Trump said on Wednesday his administration struck a deal with Pakistan in which Washington would work with Islamabad in developing the South Asian nation’s 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 wrote on social media.

“We are in the process of choosing the Oil Company that will lead this Partnership. Who knows, maybe they’ll be selling Oil to India some day!”

Pakistan says it’s close to US trade deal, Washington gives no timeline

Trump did not mention any agreement on tariffs. But Pakistan’s finance ministry said on Thursday the trade deal “will result in reduction of reciprocal tariffs especially on Pakistani exports to the United States”, but did not give details of what the tariffs would be.

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

Pakistan faced a potential 29% tariff on exports to the United States under tariffs announced by Washington in April on countries around the world. Tariffs were subsequently suspended for 90 days so negotiations could take place.

Under Trump, Washington has attempted to renegotiate trade agreements with many countries that he threatened with tariffs over what he calls unfair trade relations. Many economists dispute Trump’s characterization.

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.

Washington has also aimed to build stronger ties with Asian powers in recent years to counter its rival China’s influence in the region. Pakistan is designated by Washington as a “major non-NATO ally.”

Trump also said Washington was still negotiating with Pakistan’s rival India on trade after announcing earlier in the day that the US will impose a 25% tariff on goods imported from India starting on Friday.

Last week, Pakistani 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’s meeting 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.

Federation of Pakistan Chambers of Commerce & Industry (FPCCI), the country’s apex body of trade and industry, has welcomed the recent trade agreement between Pakistan and the United States aimed at tariff reduction, terming it a major step forward in strengthening bilateral economic ties.

“The trade agreement between Pakistan and the US regarding tariff reduction is highly commendable,” Atif Ikram Sheikh, President of FPCCI, said in a statement on Thursday.

“The tariff agreement reflects the strengthening of bilateral cooperation, trade, and investment ties between the two countries,” he added.

The remarks come after Pakistan and the US struck a deal that will result in lower tariffs for the South Asian nation as well as an agreement in which Washington will help develop Islamabad’s oil reserves, the two sides said.

“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,” US President Donald Trump wrote on social media on Wednesday.

“We are in the process of choosing the Oil Company that will lead this Partnership.”

Meanwhile, Pakistan’s Finance Minister Muhammad Aurangzeb, in a video message on Thursday, termed the trade deal a “win-win” situation for both countries.

“We are in a good place today in Pakistan, in terms of where we have arrived before August 1. We have come a long way in terms of our overall strategic partnership between Pakistan and the United States,” he said.

Pakistan faced a potential 29% tariff on exports to the United States under tariffs announced by Washington in April on countries around the world. Tariffs were subsequently suspended for 90 days so negotiations could take place.

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.

“The US is Pakistan’s largest trading partner, and this agreement will further boost the country’s exports. The agreement will lead to reduced tariffs on Pakistani products in the US and improve market access,” said Sheikh.

He added that the agreement will “mark the beginning of a new era of economic cooperation between the two countries in key sectors”.

The FPCCI President also reaffirmed the business community’s full support for the government’s initiatives aimed at national development.