Pakistan, US reach 'landmark' trade deal

Pakistan's Finance Minister Senator Muhammad Aurangzeb announcing the trade deal with the United States in Washington DC on July 30, 2025. 

Islamabad, 31 July 2025: In a landmark development, Pakistan and the United States finalized a trade agreement on Wednesday aimed at boosting bilateral trade, expanding market access, attracting investment, and fostering cooperation in areas of mutual interest.

A statement issued by the Finance Ministry of Pakistan said the breakthrough was reached during a meeting of Pakistan’s Finance Minister, Senator Muhammad Aurangzeb, with U.S. Secretary of Commerce Howard Lutnick and United States Trade Representative Ambassador Jamieson Greer in Washington, D.C..

But neither Pakistan nor the United States in their public statements mentioned the tariff details.

Secretary Commerce Jawad Paul and Pak Ambassador to the United States Ambassador Rizwan Saeed Sheikh were also present during the meeting. 

President Trump announced the trade deal via a post on Truth Social. He 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."

"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.

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.

The statement claimed this deal marks the beginning of a new era of economic collaboration especially in energy, mines and mineral, IT, cryptocurrency and other sectors. 

The deal complements Pakistan’s existing efforts of broadening the scope of Pak-U.S. economic ties and to include partnerships at the U.S. states level. 

The agreement enhances Pakistan’s access to the U.S. market and vice versa. Additionally, the deal is expected to spur increased U.S. 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.

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."

As of 2025, Pakistan has approximately 353.5 million barrels of proven oil reserves. Additionally, there was a recent substantial increase in domestic oil reserves, with a reported rise of 23%, leading to a total of 238 million barrels as of December 2024.

Recent developments indicate that Pakistan has also announced significant discoveries of oil and gas reserves in its territorial waters, which could potentially rank among the world's largest. This discovery has been part of a three-year survey conducted with an allied nation, sparking optimism about the country's economic and energy landscape.