Pakistan strikes US deal even as India faces 25% tariff blow

The United States and Pakistan have finalized a deal that will lower tariffs for Pakistan and include U.S. assistance in developing the country’s oil reserves, officials from both sides confirmed. “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,” U.S. President Donald Trump said in a social media post on Wednesday.

“We are in the process of choosing the Oil Company that will lead this Partnership,” he added, without providing further details.

The announcement came hours after Trump announced a 25 per cent tariff on all goods coming from India, plus an additional penalty for purchases of Russian military equipment and energy.


Pakistan currently imports oil from the Middle East to meet its energy demands, but there are reports about vast offshore deposits that are largely unexplored due to a lack of technical expertise and funds. The country has been trying to lure in investments to tap into these reserves.

US-Pakistan trade deal

Pakistani Foreign Minister Ishaq Dar also confirmed the agreement on social media but did not elaborate. While Trump did not mention tariffs, Pakistan’s finance ministry said Thursday the trade deal “will result in reduction of reciprocal tariffs especially on Pakistani exports to the United States,” though it did not specify the tariff levels.

“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.

Pakistan had faced the prospect of a 29% tariff on exports to the U.S. under tariffs announced by Washington in April, which were later suspended for 90 days to allow for negotiations. Last week, Dar said a trade deal was “very close” after his meeting with U.S. Secretary of State Marco Rubio, where they discussed expanding trade and cooperation in critical minerals and mining.

U.S. trade data shows total goods trade with Pakistan was $7.3 billion in 2024, up from $6.9 billion in 2023, with a goods trade deficit of $3 billion last year.

Trade talks with India

Washington’s move also aligns with its push to strengthen ties with Asian nations to counter China’s influence. Trump noted that negotiations with India on trade are ongoing, even as he announced a 25% tariff on Indian goods starting Friday.

Pakistan has credited Trump and Rubio for “de-escalating tensions” with India and facilitating a ceasefire announced on May 10, which followed deadly clashes sparked by a militant attack in Indian-administered Kashmir. India, however, disputes Trump’s claims, maintaining that any issues with Pakistan must be resolved bilaterally without outside intervention.