The last-minute trade deal between the US and Pakistan that was signed on July 31st, 2025, reflects a significant shift in Pakistan’s diplomatic and political landscapes amid the ongoing trade war between the US and China and shifting regional security dynamics.

The deal is hailed by some as pivotal in bilateral relations, while criticized by others on grounds of increased economic dependency and strategic cliency.

Owing to the prevailing situation, where Washington has been mounting tariff pressure on its key international partners including its strategic ally in south Asia (India), managing to secure significant economic concessions is no doubt a win for Pakistan.

However, the deal may deliver short-term relief to the already struggling economy of Pakistan. But in the long run, it could pose serious challenges to the country, both on the politico-economic and diplomatic fronts.

While the complete details are still pouring in, the deal mainly encompasses US commitments on tariff reduction, exploration of oil reserves in Pakistan (if any) and investing in tapping the rare earth mines mostly found in troubled areas of Baluchistan and KP. The US has reduced tariff on Pakistani exports from 29% to 19%, providing it a significant edge over other countries of South Asia, particularly its archrival India which now faces 50% tariffs.

The relatively decreased tariffs, investment in resource development and other economic concessions would likely boost the........

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