In a major shake-up of international trade, US President Donald Trump made two big announcements within hours on Wednesday.
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First, he said that the United States will now slap a 25% tariff and extra penalties on Indian goods starting August 1. He said the move was due to what he called an “unfair trade imbalance” and India’s continued oil purchases from Russia.
But just hours later, President Trump made a second announcement—this time involving Pakistan. He announced the signing of a new trade agreement between the United States and Pakistan on his platform, Truth Social. This deal will focus on developing Pakistan’s massive untapped oil reserves.
In his post, Trump 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. We are in the process of choosing the Oil Company that will lead this Partnership. Who knows, maybe they’ll be selling Oil to India some day!”
This statement quickly gained global attention—not only because of its scale but also because it came just after a harsh trade penalty on India, Pakistan’s neighbor.
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New Trade and Energy Partnership with Pakistan
Although the agreement appeared sudden, behind-the-scenes talks have been happening for some time. Following his meeting with US Secretary of State Marco Rubio just last week, Pakistan’s Foreign Minister Ishaq Dar declared that a trade agreement between the US and Pakistan was “very close.”
According to statements from both governments, the discussions included minerals, mining, and energy development. In recent weeks, several high-ranking Pakistani officials also visited the United States for trade discussions.
While President Trump did not name the oil company that will lead the project, he confirmed that the selection process is underway.
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This agreement represents a unique instance of Washington and Islamabad working together on commerce. The relationship between the two nations has frequently been complex, mostly influenced by security concerns and regional crises.
The Pakistani embassy in Washington has not released any comments yet. President Trump also did not give a timeline for when the oil development will begin.
According to trade statistics, the US goods trade deficit with Pakistan increased by 5.2% from 2023 to $3 billion in 2024. At $7.3 billion, total trade between the two nations was steadily increasing.
The US considers Pakistan a major non-NATO ally, which gives it special standing in military and economic matters. The new oil development agreement fits into Washington’s larger interests in South Asia.
Tariff Tensions with India and BRICS Criticism
At the same time as the Pakistan oil announcement, President Trump imposed a 25% tariff on Indian imports, citing both trade imbalances and India’s involvement in BRICS.
BRICS is a group of five countries—Brazil, Russia, India, China, and South Africa—that work together on economic and political matters.
President Trump criticized the bloc, saying:
“BRICS, which is basically a group of countries that are anti the United States and India is a member of that, if you can believe it… It is an attack on the dollar and we are not going to let anybody attack the dollar.”
Despite the increased tariffs, Trump stated that talks with India are still in progress.
This follows months of hostility between Pakistan and India. Indian airstrikes on May 7 followed a militant incident in Kashmir on April 22. On May 10, a ceasefire was announced, ending the fighting.
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The Pakistani foreign ministry has thanked President Trump and Secretary Marco Rubio for helping de-escalate tensions. India, however, insists that it manages issues with Pakistan without third-party involvement.
While India now faces increased import costs, Pakistan may gain from renewed US trade support. American companies may soon begin working to extract oil on Pakistani soil, marking a new chapter in US-Pakistan cooperation.