(Bloomberg) – The U.S. sealed a trade deal with Pakistan as their officials wrapped up talks in Washington, agreeing to develop oil reserves.
The pact involves a reduction of the so-called reciprocal tariffs, especially on Pakistani exports, according to a statement by Pakistan’s finance ministry on Thursday. No details on tariffs were shared by either side.
U.S. President Donald Trump said in a post on Truth Social that the two countries will “work together on developing their massive oil reserves,” adding that officials are now selecting a company to anchor the partnership. The agreement will spur U.S. investments in Pakistan’s infrastructure, besides deepening market ties between the two sides, the ministry said.
Pakistan Stock Exchange’s benchmark index closed 0.6% higher with energy exploration companies among the leading gainers.
Relations between Islamabad and Washington have been showing signs of easing after prolonged tensions. President Trump welcomed Pakistan’s army chief, Field Marshal Asim Munir, for rare talks at the White House in June.
Pakistan will continue to ensure that trade and investment “go hand-in-hand,” Muhammad Aurangzeb, the South Asian nation’s finance minister said in a video message released after the deal. He said investments will also take place later in other sectors including minerals and mining, IT and digital infrastructure.
Pakistan, which lists the U.S. as one of its top export destinations, had offered to boost American imports, particularly cotton and soybean. The South Asian nation sold over $5 billion worth of goods to the U.S. as of 2024, and imported about $2.1 billion.
Pakistan may come out as the most beneficial among South Asian nations if its tariff is reduced, said Bloomberg Economics’ Ankur Shukla. “This means its exports would get a competitive advantage.”
The Trump administration had imposed an initial 29% tariff rate on Pakistani exports into the U.S. Other South Asian countries are facing tariffs ranging between 25%-35% after negotiations, according to Shukla.
The South Asian nation’s oil reserves are estimated at 238 million barrels in 2024. ExxonMobil in a joint venture attempted to find oil and gas in an offshore site in Pakistan’s six years ago but did not find any reserves.
