Surinder Sharma
In a significant shift in trade policy, U.S. President Donald Trump has announced that the United States will impose only a 19% tariff on imports from Pakistan—marking the lowest U.S. tariff rate for any South Asian country. The announcement comes just a day after the Trump administration revealed a new oil and trade agreement with Pakistan.
This development reflects a major change from Trump’s earlier position in April, when he proposed a 26% tariff on Indian goods and 29% on Pakistani imports. Under the latest policy revision, India receives a 1% tariff concession, while Pakistan receives a substantial 10% reduction.
The back-to-back announcements suggest growing warmth in U.S.-Pakistan relations. The newly signed oil and trade deal involves U.S. support in oil exploration, processing, and storage infrastructure development within Pakistan.
In recent months, Washington and Islamabad have taken notable steps toward closer ties. In June, Pakistan formally nominated President Trump for the Nobel Peace Prize. Following the ceasefire agreement between India and Pakistan, Trump had publicly declared, “I love Pakistan.”
Analysts suggest that the reduced tariffs are not just a diplomatic gesture but also a strategic move in the context of U.S.-China rivalry. China has invested heavily in Pakistan through the China-Pakistan Economic Corridor (CPEC), a key component of Beijing’s Belt and Road Initiative (BRI), which provides China with direct access to the Arabian Sea.
By strengthening trade and energy ties with Pakistan, the U.S. may be seeking to counter China’s growing influence in the region. Improved U.S.-Pakistan relations could allow Washington to dilute China’s hold on the BRI, or at least establish a counter-presence in critical areas.
Furthermore, the proximity of Pakistan to China’s sensitive Xinjiang region and the U.S.’s growing engagement in areas like Balochistan may offer Washington strategic surveillance opportunities. The Balochistan region is also home to China’s ambitious Gwadar Port project, a crucial node in Beijing’s maritime expansion.
The latest moves mark a notable pivot in U.S. foreign policy in South Asia, with implications not just for trade, but also for the regional balance of power.
U.S. President Donald Trump has announced the finalization of a major oil deal with Pakistan, under which the United States will assist in the development of Pakistan’s vast oil reserves. In a social media post shared on Wednesday, Trump stated that the agreement marks a significant step in energy cooperation between the two countries.
As part of the announcement, President Trump also speculated that Pakistan might one day become an oil exporter to India. “Perhaps one day, Pakistan will sell oil to India,” he wrote, hinting at a potential regional energy shift.
In a related development, the U.S. administration warned that it may impose penalties on India for continuing to purchase oil and weapons from Russia. The move could escalate trade tensions between Washington and New Delhi.
India’s Ministry of Commerce and Industry responded by saying it is closely monitoring the developments and will take all necessary steps to safeguard national interests.
The potential tariffs are expected to impact several sectors, including steel, aluminum, automobiles, textiles, electronics, and jewelry—industries that form a significant part of India’s export economy.
