Washington, DC / Islamabad – With quiet urgency and little fanfare, a high-level Pakistani delegation landed in Washington this week in what officials are calling a “final round” of negotiations on a long-anticipated trade agreement with the United States.
The talks, which have been ongoing for over a month, come as Pakistan looks to recalibrate its economic relations with the US and ease tensions over steep import tariffs imposed under the administration of former President Donald Trump — duties that remain in place under his second term.
Led by Commerce Secretary Jawad Paal, the delegation is holding meetings with US Trade Representative Jamieson Greer and other senior officials. According to Pakistan’s Finance Ministry, the discussions are not just about market access and tariff reductions but part of a broader effort to “reset economic ties at a time of shifting geopolitical alignments.”
From Tariffs to Trust
Pakistan currently faces up to 29 percent tariffs on its exports to the United States, a legacy of Trump-era protectionism. Despite those restrictions, Islamabad managed to maintain a $3 billion trade surplus with Washington in 2024, driven mainly by textile and surgical goods.
But behind the numbers lies a sense of imbalance.
“These tariffs are hurting our competitiveness,” said a Pakistani trade official familiar with the talks. “We’re not asking for special treatment — we’re asking for a level playing field.”
In exchange for tariff relief, Pakistan has offered to boost imports of US goods, particularly in the energy sector, where the US is eager to sell crude oil and liquefied natural gas (LNG). Islamabad is also opening its doors to American investment in mining, most notably in the Reko Diq copper-gold project, one of the world’s largest undeveloped mineral deposits.
Reko Diq: The $7 Billion Bargaining Chip
The Reko Diq site, located in Pakistan’s resource-rich but politically sensitive province of Balochistan, could become a linchpin in the new trade arrangement. The US Export-Import Bank is currently reviewing financing proposals worth up to $1 billion for the mine’s development, and a recent webinar co-hosted by both governments highlighted public-private partnership opportunities in the sector.
“This is not just about minerals,” says Sara Khan, an Islamabad-based energy and policy analyst. “This is about Pakistan showing it’s open for business — and about the US re-entering a region where China has been dominant for a decade.”
Indeed, much of the conversation surrounding the new agreement is being viewed through the lens of US-China competition. The China–Pakistan Economic Corridor (CPEC), part of Beijing’s Belt and Road Initiative, has already poured billions into Pakistan’s infrastructure. Washington, analysts say, is now seeking a strategic economic foothold of its own.
Diplomacy Meets Dollars
The talks are part of what both governments have described as a “strategic and investment partnership.” While specific details remain under wraps, officials say the plan includes tariff adjustments, energy cooperation, regulatory reform, and possible defense industrial collaboration in the long term.
But the agreement is not without complications.
One key issue is whether the US is ready to grant Pakistan tariff relief while still pursuing aggressive trade leverage with other partners, including India. President Trump has suggested that finalizing trade agreements with both Pakistan and India could support regional stability — a claim met with skepticism in both New Delhi and Islamabad.
Meanwhile, in an interview with Fox Business, US Treasury Secretary Scott Bessent indicated that negotiations with Pakistan are part of a broader push to finalize trade deals with 18 countries. “If we can ink 10 or 12 of the important 18 … then I think we could have trade wrapped up by Labour Day,” he said.
A Broader Pivot or a One-Off Deal?
For Pakistan, the stakes are high. With a fragile domestic economy, ongoing fiscal austerity, and a heavy reliance on IMF assistance, Islamabad needs not just short-term deals but long-term investment and diversification.
For the United States, this may be an opportunity to rebuild diplomatic bridges, promote economic resilience in South Asia, and counter Beijing’s influence without boots on the ground.
Still, skepticism lingers.
“Pakistan has been here before,” said Moeed Yusuf, a former national security adviser. “There have been many moments where the US and Pakistan promised to move from transactional to strategic. The question now is whether both sides are finally ready to do the hard work to make that shift real.”
