Pakistan has bagged a low-tariff trade deal with the US, signalling a major shift in Washington’s South Asia policy under Trump.
Pakistan has secured a trade deal with the United States ahead of India and at a lower tariff rate, indicating Washington’s shift in its South Asia policy. US President Donald Trump, who had earlier announced a 25% tariff on Indian goods, slapped a 19% tariff on Pakistan, suggesting America’s tilt towards Islamabad. The trade deal with Pakistan comes after Trump repeatedly took credit for brokering the ceasefire between India and Pakistan following Operation Sindoor. Notably, India denied any foreign hand in the ceasefire, calling it a bilateral decision taken after Pakistan’s DGMO approached New Delhi. Pakistan, on the other hand, warmed up to Trump, thanking him for helping with the ceasefire, even nominating him for the Nobel Peace Prize for his contributions during the India-Pak escalations.
Coming back to the trade deal, Pakistan Prime Minister Shehbaz Sharif called it “a landmark deal, which will enhance our growing cooperation and expand the frontiers of our enduring partnership in the days to come”.
“I wish to convey my profound thanks to President Trump @realDonaldTrump for his leadership role in finalization of the historic US-Pakistan trade agreement, successfully concluded by our two sides in Washington, last night. This landmark deal will enhance our growing cooperation so as to expand the frontiers of our enduring partnership in days to come,” he wrote on X.
President Trump made this announcement via a post on Truth Social, however, the White House has yet to make an official statement regarding the agreement.
Washington’s Changing Attitude
Before announcing the trade deal with Pakistan, Trump had taken a “dead economy” jibe at India and Russia, and also said that the US is working with Islamabad to develop their oil reserves, suggesting that “maybe someday Pakistan will sell oil to India”. These remarks are not going to make New Delhi any happier.
“I don’t care what India does with Russia. They can take their dead economies down together, for all I care. We have done very little business with India — their tariffs are too high, among the highest in the world. Likewise, Russia and the USA do almost no business together,” Trump said in a post on Truth Social.
The post came just hours after the US President announced a 25 per cent tariff on India, saying that the move was meant to reduce the massive trade deficit with India and also criticised India for buying a “vast majority” of its military equipment and energy from Russia.
“Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country,” Trump said.
In its response, India stated that it would take all necessary measures to safeguard and advance its national interests, adding that the implications of the new tariffs are currently under review. Commerce Minister Piyush Goyal on Thursday said that India will protect its national interest while pursuing any trade deal with world economies. Goyal’s comments in the Parliament come after US announced a 25% tariff on India.
“In less than a decade, India came out of ‘Fragile Five’ economies and it has now become the fastest-growing economy of the world. On the basis of the hardwork of reforms, farmers, MSMEs and industrialists, we have come in the top 5 economies of the world from the 11th largest economy. It is expected that we would be the third largest economy in a few years. Today, global institutions and economists see India as a bright spot in the global economy..,” Goyal said.
Meanwhile, Trump also brought up India’s role in the BRICS alliance — comprising Brazil, Russia, India, China, and South Africa — which he described as being “anti-US.”
During a White House event on Wednesday, Trump was asked about potential additional penalties India might face for continuing its purchases from Russia.
“Well, we’re negotiating right now, and it’s also BRICS. You know, they have 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,” Trump said adding that “it’s an attack on the dollar, and we’re not going to let anybody attack the dollar.”
Experts believe that the traditional US approach, since the Bill Clinton era, of recognising India’s growing strategic importance seems to be fading. New Delhi officials and analysts told the NYT that Washington’s changing attitude has disrupted a bilateral relationship built over decades, one that respected India’s independent balancing act amid China-Russia dynamics.
Christopher Clary (University at Albany) remarked that India has often refused to make positive-sum compromises out of principle, whereas Pakistan has frequently appeared more flexible, facilitating better ties with the US.
Some analysts noted that Pakistan’s geographic proximity to Iran and Afghanistan may now be viewed as more valuable by Washington, especially amid rising tensions in the region. The discovery of large oil and rare earth deposits in Pakistan has also reportedly influenced Washington’s recalibration of its regional priorities.