The United States and Pakistan are now approaching a crossroads that, in some ways, they have been remapped to an increasingly transactional pragmatist relationship as opposed to one informed by a strategic partnership. Bilateral ties crystallized under the Trump administration’s “America First” doctrine that squeezes all aspects of global responsibilities for the country into the confines of its immediate security interests. The impact of this shift goes further, it is a rejection of what should have been a legacy of cyclical cooperation and disillusionment accumulated over decades.

Pakistan’s strategic value to the U.S. remains tied to counterterrorism rather than broader economic or diplomatic cooperation.

But implicit in the whole recalibration is Washington’s laser focus on counterterrorism. The fact that this dynamic is underway is evidenced by the recent joint operation that resulted in the arrest of ISIS-Khorasan leader Sharifullah, which President Trump said was a “monumental win.” While the raid represents tactical cooperation, it conceals a deeper reality: U.S. involvement is still dependent on Pakistan’s usefulness in fighting groups that threaten American interests. Payment of $397 million in exchange for the upkeep of Pakistan’s F-16 fleet underwrites this quid pro quo. In the Cold War Era playbook, such transactions peppercorned the geopolitical play for security assistance.

Something about this transactional approach has diminishing returns. Trump’s giving of the security assistance a seven-year freeze (2016-2023), based on his charges that Pakistan was playing ‘lies and deceit,’ left a lasting mark. While they are partially revived, security cooperation today functions within limited parameters shaped by Washington’s increasing alliance with India and Islamabad’s indisputable economic ties to China.

How financial pressure has usurped aid as America’s most favored leverage includes its Prolonged Grey list of Pakistan via FATF, which thanks to U.S. lobbying expedited the process. Some concessions would be gained by this coercive diplomacy, in the form of sanctions on Lashkar-e-Taiba, even if the gauntlet of perceived U.S. arbitrarily delivered little in the way of defensive efficacy.

Economically, the relationship teeters on paradox. While Pakistan continues to be the largest export destination of the U.S. ($5 billion annually) and a key investor in energy and the tech sectors, Trump’s protectionist trade policies could put these gains at risk. It is a suspension of USAID projects and uncertainty about the U.S. Pakistan Green Alliance—the climate resilience initiative—of how myopic a security focus is, negating developmental partnership.

Islamabad’s ambitions for trade diversification via the 2020s “reset” rub up against Washington’s opposition to replace China’s $62 billion CPEC investments. When Trump complains about CPEC being a ‘toll on Pakistan’s economy’, he inadvertently shows us America’s default of being able to offer something more credible.

Washington’s transactionalism reduces Pakistan to a counterterrorism subcontractor while neglecting economic grievances that fuel extremism.

The ultimate litmus test for all transactional logic is the China factor. It puts Pakistan in an ever more untenable position as it faces Trump’s confrontational stance toward Beijing. Given that CPEC will underpin Pakistan’s infrastructure modernization, and that China provides its economy with 30 percent of its foreign debt, Islamabad can’t afford to ‘distance’ itself from Beijing as Washington demands. However, the U.S. still exploits Pakistan’s geographic necessity, particularly concerning Afghanistan. Current intelligence sharing on cross-border militant movements indicates both countries understand that full isolation can’t be attained.

This is made all the more difficult by domestic politics. Prime Minister Shehbaz Sharif’s government at 14% inflation and with an impending IMF repayment cliff, is seeking U.S. validation to add a stamp of counterterrorism credibility. Trump’s public praise for Pakistan’s “sacrifices” against extremism—a marked shift from his 2018 tweetstorm—offers reprieve but no structural solutions. Just as Washington has relied on Pakistani military-intelligence channels, demonstrated in CIA-ISI coordination in the Sharifullah raid, Pakistani democracy suffers a similar fate of the army continuing to dominate in the realm of foreign policymaking.

They also argued that this transactionalism would end up being a self-fulfilling prophecy. The U.S. instead neglects economic grievances at the heart of extremism by reducing Pakistan to a counterterrorism subcontractor. This disconnect has been evident in the slight rise in Baloch separatist violence in 2025 including the BLA’s train hijacking. On the contrary, Pakistan’s elite quest for issues that focus on military strategic ones, and not much on the development of trade as well as human capital, makes it dependent on external pupils.

The path forward demands recalibration. Integrating Pakistan into Indo-Pacific economic architectures would not only revive mutual interests but Washington could also no longer view it as a Chinese satellite. In this case, the assumption of CPEC’s debt risks could be offset by the federal government by expanding its membership to include joint renewable energy ventures of the government with investors. To attract U.S. investment beyond the security sector, it will be important for Islamabad to diversify its exports away from textiles and to capitalize on its mineral reserves such as the world’s fifth-largest copper deposits.

U.S. financial pressure, from FATF restrictions to security aid suspensions, has replaced direct assistance as the primary tool of influence.

The relationship achieves more of a measure of resilience from grim realism: Pakistan can’t purge U.S. influence and simultaneously deal with IMF programs; America can’t toss Pakistan from its path of least resistance while cutting through the Strait of Malacca with critical Asia trade routes. But as Trump’s nuclear transactional mantra gains momentum, both nations must face the contradiction upon which their partnership was predicated: cooperation is necessary between nations of a shared global interest for cooperation that fundamentally differ in their vision for regional order.

To forge such an effective engagement model, on which their relationship can evolve, they must first accept this tension. The alternative: an eternal marriage of convenience, is neither good for the advancement of democracy nor a steady state in South Asia’s volatile region.

Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.