The United States and Pakistan concluded a trade deal on 31 July 2025. This deal aims to reduce tariffs on Pakistan on its exports to the US. The United States has imposed a 19% tariff on Pakistan, lowered from an initial 29% tariff that was announced as part of a broader global tariff. The tariff on Pakistan is the lowest in South Asia. Moreover, President Trump also announced an agreement focusing on Pakistan’s oil reserves.
“The tariff on Pakistan is the lowest in South Asia.”
Pakistan’s Field Marshal Syed Asim Munir paid two high-level visits to the US in just six weeks, marking a significant development in Pakistan-US relations. This has sparked speculations about Islamabad’s strategic realignment with the US and its negative impression of growing Pakistan-Russia relations.
Pakistan-US economic cooperation is just transactional and should not be misinterpreted as a fundamental change in Pakistan’s foreign policy orientation. Pakistan’s multi-vector foreign policy, anchored in a multipolar global order, remains consistent and undisturbed. Pakistan’s economic and security ties with Russia remain an important pillar for Islamabad. Both countries, Pakistan and Russia, are cooperating in several areas, including trade, energy, security, and education.
The renewed economic engagement between the US and Pakistan is best characterized as a transactional diplomatic relationship driven by short-term interests. The reduction in the tariff from 29% to 19% is a tactical move by the US to secure an agreement with Pakistan for access to critical minerals.
This trade deal provides an advantage to Pakistani exporters in the US market, as the tariff rate on Pakistan is the lowest compared to regional competitors. The Pakistan Ministry of Commerce highlights that this deal will create new opportunities for Pakistani businesses in multiple sectors, including agriculture, textiles, and manufacturing.
Global geopolitics has changed significantly after the Cold War. During the Cold War, both Pakistan and Russia were in opposite blocs, and the relations were mostly antagonistic. The 21st century has witnessed the transition from unipolarity to multipolarity. This has created new opportunities for middle powers like Pakistan to balance their relations with all global and regional powers.
“Pakistan-US economic cooperation is just transactional in nature and should not be misinterpreted as a fundamental change in Pakistan’s foreign policy orientation.”
The relations between Pakistan and Russia have undergone from hostile relations during the Cold War to a pragmatic partnership in the present times. The rationale behind the pragmatic partnership between Islamabad and Moscow is the convergence of interests. Both countries sought to diversify their economic relations from traditional partners and to counter terrorism in the region. There is a mutual recognition of the changing global dynamics, where rigid bloc politics have been replaced by a multipolar world order that allows more flexible and overlapping alliances.
A solid economic and security foundation, resilient to external pressures, has built the emerging entente between Pakistan and Russia. Russia has become a major economic investor in Pakistan, as Russia announced to revive the Pakistan Steel Mill and projects like the Pakistan Stream Gas Pipeline. Moreover, in 2024, the trade volume between Islamabad and Moscow surpassed 1 billion US dollars. In the security realm, the two countries have engaged in joint military exercises to counter terrorism in the region.
The recent US-Pakistan trade deal that reduces tariffs on Pakistani exports is a transactional arrangement driven by short-term interest rather than strategic realignment. This deal confers benefits for both states. Washington is likely to secure access to critical minerals, and the reduced tariff provides an advantage to Pakistani exporters to acquire access to the US market.
“The US-Pakistan trade deal is a tactical move that does not supersede the resilient foundations of Pakistan’s relationship with Russia.”
Although this deal provides benefits for Pakistani businesses, it does not indicate a realignment with the United States. In a multipolar world order, middle powers like Pakistan can navigate great power competition through multi-vector foreign policy. Ultimately, the US-Pakistan trade deal is a tactical move that does not supersede the resilient foundations of Pakistan’s relationship with Russia, which continue to evolve based on overlapping regional priorities.
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.
