Former U.S. President Donald Trump announced on Wednesday that Washington has finalized an agreement with Pakistan to jointly develop the country’s substantial oil reserves. The announcement was made via his Truth Social account, where he described it as a major step in deepening energy cooperation between the two allies.
“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,” Trump wrote. He added that the selection process for the leading oil company in the partnership is underway. “Who knows, maybe they’ll be selling oil to India someday!” he quipped.
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Although Pakistan has long suggested the presence of large oil deposits along its coastline, this marks the first significant move toward their development at the international level.
Trump’s reference to India was notable, especially following his imposition of a 25% tariff on Indian imports. The tariffs were part of a broader response to India’s continued oil and defense purchases from Russia.
In the same post, Trump signaled that several countries are exploring options for tariff relief. “Likewise, other Countries are making offers for a Tariff reduction. All of this will help reduce our Trade Deficit in a very major way,” he stated. He added that a full report would be shared in due course.
Trump also cited South Korea, which is currently facing a 25% tariff, saying they had made an offer to reduce those tariffs — potentially inviting similar proposals from other countries like Pakistan.
Pakistan Seeks Fair Trade Terms
In response to the tariffs, Pakistani officials have proposed increasing imports of American goods — including oil — instead of accepting harsher trade terms.
Finance Minister Mohammad Aurangzeb, currently in Washington, has entered what officials describe as final-stage discussions with senior U.S. authorities. A deal is expected to be reached before the August 1 deadline.
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Foreign Minister Ishaq Dar, speaking recently at the Atlantic Council, expressed optimism: “We hope to conclude a mutually beneficial trade agreement… hopefully in days, not in weeks.” He noted that a dedicated committee had been formed to finalize the terms.
While the specific tariff rate under negotiation has not been revealed, Pakistani officials say they are aiming for terms similar to those granted to Japan, Indonesia, the Philippines, and Vietnam — where tariffs range between 15% and 20%.
Tensions Rise with India
Trump also confirmed that India will face a 25% tariff starting August 1, along with an additional, unspecified penalty, due to its ongoing purchases of Russian oil and military equipment.
“They have one of the highest tariffs in the world now, and they’re willing to cut it very substantially. But we’ll see what happens,” Trump told reporters.
On Truth Social, Trump criticized India’s “strenuous and obnoxious” non-monetary trade barriers and reliance on Russian energy and arms, saying these practices have limited trade between the two countries.
“India will therefore be paying a tariff of 25%, plus a penalty for the above, starting on August 1,” he wrote, warning that countries that fail to reach agreements by week’s end will receive no extensions.
This would mark the first application of what Trump refers to as “secondary tariffs” — an alternative to financial sanctions, targeting countries engaged in trade with embargoed nations, such as Russia.
India’s government issued a response saying it was evaluating Trump’s announcements and remained committed to reaching a fair and balanced trade deal with the U.S.
Following the news, the Indian rupee dropped 0.4% to approximately 87.80 per U.S. dollar in the non-deliverable forwards market. Gift Nifty futures fell 0.6% to 24,692 points.
Sanctions on Indian Companies
Meanwhile, the U.S. State Department announced sanctions on six Indian companies for trading in Iranian petroleum, petrochemical, or petroleum products. The sanctioned firms include:
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Kanchan Polymers – imported over $1.3 million in Iranian petrochemicals.
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Alchemical Solutions – imported more than $84 million in Iranian products.
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Ramniklal – brought in over $22 million in Iranian-origin materials.
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Jupiter Dye Chem – involved in over $49 million worth of Iranian imports.
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Global Industrial – imported over $51 million in products including methanol.
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Persistent Petrochem Private Limited – responsible for about $14 million in imports.
The State Department also imposed sanctions on multiple firms based in China and the UAE, along with several oil tankers involved in similar trade activities.