By Kanishka Singh, Asif Shahzad and Ariba Shahid
WASHINGTON/ISLAMABAD (Reuters) -The U.S. and Pakistan have 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,” U.S. President Donald Trump wrote on social media on Wednesday.
“We are in the process of choosing the Oil Company that will lead this Partnership.”
Trump’s social media post did not provide further details.
Pakistani Foreign Minister Ishaq Dar also confirmed the deal’s conclusion on social media, without elaborating further.
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.
Last week, Dar said the U.S. 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.
Dar and Rubio had discussed expanding trade and ties in critical minerals and mining, both sides said after that meeting. Other Pakistani officials have also visited the U.S. in recent weeks for talks.
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.
U.S. total goods trade with Pakistan was an estimated $7.3 billion in 2024, according to the website of the office of the U.S. trade representative, up from around $6.9 billion in 2023. The U.S. 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.”
