On July 31, 2025, the US Pakistan trade deal aimed at strengthening economic ties between the two nations. The deal focuses on reducing tariffs on Pakistani exports to the US and includes a partnership to develop Pakistan’s oil reserves, which have been described as significant but remain largely unexplored due to limited technical expertise and funding.
Details of US Pakistan Trade Deal
The agreement comes after months of negotiations, with Pakistani officials, including Finance Minister Mohammad Aurangzeb, engaging with US counterparts in Washington. The deal is expected to boost bilateral trade, enhance market access, Juno, and foster cooperation in sectors like energy, minerals, and technology. Pakistan’s embassy in the US highlighted the agreement’s potential to attract investment and expand economic collaboration, particularly in energy and IT.
A key aspect of the deal involves US assistance in tapping Pakistan’s offshore oil reserves, estimated to require substantial investment and years of development. The US is currently selecting an oil company to lead this initiative, which could reshape regional energy dynamics. Pakistani officials have expressed optimism about the agreement, noting its role in deepening economic ties and reducing the $3 billion trade deficit with the US by increasing imports of American goods.
The deal follows a 90-day suspension of a potential 29% tariff on Pakistani exports, announced in April 2025, allowing time for these negotiations. While specific tariff rates remain undisclosed, Pakistan sought terms similar to recent US trade deals with countries like Japan and Vietnam, which range between 15% and 20%. The agreement also aligns with broader US efforts to counter China’s influence in South Asia, with Pakistan designated as a major non-NATO ally.
What’s Next
This development coincides with heightened US trade actions in the region, including a 25% tariff on Indian goods starting August 1, 2025, due to India’s trade policies and ties with Russia. Pakistan’s agreement with the US positions it favorably in this shifting geopolitical landscape, potentially paving the way for future energy exports, though details remain limited as discussions continue.
Published in SouthAsianDesk, July 31th, 2025
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