Trump Announces US-Pakistan Oil Deal Amid Tariff Dispute with India

President Trump announced a new US-Pakistan deal to jointly develop Pakistan’s oil reserves. Pakistan says the agreement also includes reduced US tariffs on its exports, though details remain unclear. The announcement follows suspended US tariffs on Pakistan and comes a day after the US imposed a 25% tariff on India over its trade with Russia. Trump criticized India’s high tariffs and hinted Pakistan might sell oil to India in the future.

United States President Donald Trump made a late-night announcement on Wednesday revealing that he had finalized an agreement with Pakistan. The deal outlines a new partnership between Washington and Islamabad, under which the United States will assist Pakistan in developing its significant oil reserves. Trump disclosed this development on his social media platform, Truth Social, where he wrote, “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.”

Following Trump’s announcement, Pakistani officials also confirmed the agreement. The country’s deputy prime minister and foreign minister, Ishaq Dar, acknowledged the deal in a brief post on X (formerly known as Twitter), stating simply, “Pakistan concludes deal with USA,” without offering any additional commentary or details. According to Pakistani authorities, the agreement includes a commitment from the United States to reduce tariffs on Pakistani exports, though the precise nature and extent of this tariff relief were not disclosed.

Interestingly, President Trump made no mention of tariffs in his own public remarks. He instead focused on the energy aspect of the deal, noting, “We are in the process of choosing the Oil Company that will lead this Partnership,” suggesting that discussions are still ongoing regarding which American company will take the lead in developing Pakistan’s oil assets. The absence of specific details about the location and size of the oil reserves in question, as well as the terms of the tariff adjustments, leaves several key components of the deal unclear for now.

This agreement follows months of negotiations and comes amid a broader context of shifting trade relations between the United States and South Asian countries. In April, Pakistan was on the verge of facing a steep 29% tariff on its exports to the U.S. However, that tariff threat was suspended for 90 days to provide room for further trade discussions, eventually leading to the deal announced on Wednesday.

On Thursday, Pakistan’s Finance Minister, Mohammad Aurangzeb, spoke about the deal during his visit to Washington, describing it as a mutually beneficial arrangement. Aurangzeb, who was making his second visit to the U.S. capital in as many weeks, said he had been involved in final-stage negotiations with senior U.S. officials. In a video statement released by Pakistan’s finance ministry, he described the agreement as going beyond immediate trade concerns, emphasizing that it represents a broader vision of economic cooperation.

“From our perspective, it was always going beyond the immediate trade imperative, and its whole purpose was, and is, that trade and investment have to go hand in hand,” Aurangzeb explained in the video.

The timing of the U.S.-Pakistan deal is particularly notable, coming less than 24 hours after Washington announced the imposition of a 25% tariff on India, Pakistan’s regional rival. That decision, which includes other financial penalties, is set to take effect on August 1. It targets India's continued trade with Russia despite ongoing Western sanctions and the war in Ukraine.

During his announcement of the new tariffs on India, Trump offered a sharp critique of both the Indian and Russian economies. He dismissed concerns over India's ties with Moscow and downplayed their economic relevance to the United States. “I don’t care what India does with Russia. They can take their dead economies down together, for all I care. We have done very little business with India, their Tariffs are too high, among the highest in the World,” he stated.

In contrast to the hostile tone taken toward India, Trump expressed optimism about the potential of U.S.-Pakistan relations, even suggesting that the oil deal might someday benefit India indirectly. “Who knows, maybe they'll be selling Oil to India some day!” Trump remarked, hinting at the possibility of improved regional cooperation in the future, despite the current political tensions.

While many elements of the deal remain vague, the announcement marks a significant moment in U.S.-Pakistan relations, suggesting a renewed strategic partnership focused on energy development and economic collaboration, even as Washington adopts a more adversarial stance toward India.