• No official word from US; PM Shehbaz thanks Trump
• Islamabad says agreement includes reduction of tariffs; diplomatic circles believe US will charge 15-20pc on Pakistani goods
• Trump rails against India, Russia; many countries still in a lurch as tariff deadline expires
WASHINGTON: A day after signing an agreement with the United States to develop “massive oil deposits” in Pakistani territory, Pakistani officials said the two nations had concluded a trade deal on Thursday, establishing a uniform tariff rate for bilateral trade.
“The agreement will result in a reduction of reciprocal tariffs, especially on Pakistani exports to the United States,” said an official statement released by the Pakistan Embassy in Washington.
In a statement issued in Islamabad, Prime Minister Shehbaz Sharif called it “a landmark deal, which will enhance our growing cooperation and expand the frontiers of our enduring partnership in the days to come”.
He also thanked US President Donald Trump “for his leadership role in finalising this historic US-Pakistan trade agreement”.
The embassy noted that the deal would boost bilateral trade, expand market access, attract investment and foster cooperation in areas of mutual interest.
The breakthrough was reached during a meeting between Finance Minister Muhammad Aurangzeb and US Secretary of Commerce Howard Lutnick, along with United States Trade Representative Ambassador Jamieson Greer, in Washington. Secretary Commerce Jawad Paul and Pakistan’s Ambassador to the United States Rizwan Saeed Sheikh were also present.
President Trump announced the trade deal via a post on Truth Social, though he only mentioned the agreement to explore oil deposits. Similarly, the Pakistani statement placed more emphasis on the oil arrangement.
While Pakistan is celebrating the deal, the United States has yet to make an official statement regarding the agreement.
Moreover, while President Trump has mentioned specific tariff rates in announcements with other countries, he did not provide such details regarding the agreement with Pakistan.
However, diplomatic sources said the United States has agreed to charge a 15 to 20 per cent tariff on goods from Pakistan. The sources noted that the deal gives Islamabad an edge over India, which has been slapped with a 25pc tariff rate and penalised for buying weapons and oil from Russia and Iran.
The embassy noted that the deal marks the beginning of a new era of economic collaboration, especially in energy, mining and minerals, IT, cryptocurrency and other sectors.
It complements Pakistan’s ongoing efforts to broaden the scope of Pakistan-US economic ties and to include partnerships at the US state level. The agreement enhances Pakistan’s access to the US market — and vice versa.
The deal is expected to spur increased US investment in Pakistan’s infrastructure and development projects.
“This trade agreement underscores the commitment of both nations to deepen their bilateral relationship and explore all avenues for strengthening trade and investment ties,” the official statement added.
‘Changing attitude in Washington’
Hours after announcing the oil exploration deal, President Trump posted another message on his official site, clearly expressing his frustration with India.
“I don’t care what India does with Russia. They can take their dead economies down together, for all I care,” he wrote. “We have done very little business with India. Their tariffs are too high — among the highest in the world.”
Dr Aparna Pande, the director of the India Initiative at the Hudson Institute in Washington, told the New York Times that “for the first time in 35 years, [India] is faced with an American administration that is not driven by strategic altruism”.
The nuance in the bilateral relationship embraced by US presidents since Bill Clinton — because of India’s rising importance to America’s national security — “appears to be fading”, Dr Pande said.
Analysts and officials in New Delhi told the Times that the changing attitude in Washington “has disrupted a relationship built painstakingly over decades, one that recognised India’s balancing act in a difficult region dominated by China and Russia”.
India had been allowed to grow closer to the United States on its own terms and had taken a firmer stance on China, the report added.
Christopher Clary, associate professor of Political Science at the University at Albany, said in a social media post that “if you were to summarise the history of US-India and US-Pakistan ties, it would go something like this: India sometimes refuses to make positive-sum compromises out of principle, and Pakistan has often compromised — or at least pretended to compromise — to ensure positive ties with Washington.”
Other analysts argued that the discovery of vast deposits of rare earth materials and oil also caused the change in Washington’s thinking.
Some analysts also draw a parallel between recent developments in Iran and the shift in Washington, pointing out that Pakistan borders two sensitive countries, Afghanistan and Iran.
‘New world trade order’
Meanwhile, Trump’s dream of a new world trade order faced a crucial test on Thursday, with dozens of economies — including key commercial partners like Canada — yet to secure US tariff deals ahead of a midnight deadline.
The last-gasp scramble to strike bilateral accords came as an appeals court in Washington considered the legality behind Trump’s strategy of invoking emergency economic powers to declare sweeping duties on imports.
The 79-year-old Republican doubled down on the wide-ranging levies, posting on Truth Social: “Tariffs are making America GREAT & RICH Again”.
He insisted in a separate post that the world’s biggest economy would have “no chance of survival or success” without protectionist measures.
However, in a sign of flexibility, he announced on Friday that he was delaying a tariff hike on Mexican products originally due on Friday for 90 days after talks with counterpart Claudia Sheinbaum.
So far, Washington has announced pacts with Britain, Vietnam, Japan, Indonesia, the Philippines, South Korea and the European Union, with those new rates expected to take effect Friday.
South Korea squeezed in a last-minute agreement on a 15pc tariff, significantly below the 25pc that Trump threatened on its goods.
But Trump announced 50pc tariffs on Brazilian products — while postponing imposition and allowing key exemptions — as an effort to pressure the US ally to drop its prosecution of right-wing former president Jair Bolsonaro on coup charges.
He also unveiled a 25pc levy on Indian imports, and warned Canada it would face trade repercussions for planning to recognise a Palestinian state.
And the details of the agreements that have been made remain vague. For example, the EU, while having reached a pact, continues pushing for a carve-out for its wine industry.
With input from AFP
Published in Dawn, August 1st, 2025