Transactional Paths, Shared Interests: Reframing US–Pakistan Ties
Since the 1950s, Pakistan and the USA have had a fluctuating relationship characterized by cooperation and mistrust. The US viewed Pakistan as a strategic partner, especially during the Cold War and post-9/11, and Pakistan received billions of dollars in economic development and military assistance. The US imposed sanctions in 1990 over Pakistan’s nuclear program and a military coup, reinstating aid after 9/11 as Pakistan serves as a frontline ally of the US against terrorism, which further deepens the military ties. But Americans were frustrated due to Pakistan’s selective targeting of militant groups in the war on terror. The Barack Obama administration recalibrated that partnership, and Pakistan received billions of dollars in civilian development and military assistance through the Kerry-Lugar-Berman Act (2009), but declined after the 2011 raid that killed Osama bin Laden, leading to accusations of Pakistan’s ‘double standard. Relations soured as Drone strikes intensified in the tribal areas of Pakistan, which caused domestic backlash and anti-American sentiment.
In this environment, Donald J. Trump assumed the presidency in January 2017, introducing an unconventional approach to foreign policy marked by his “America First” agenda. He expressed limited interest in foreign interventions, withdrew from various global agreements, and implemented strict immigration policies. His “stick and carrot” strategy involved offering incentives for cooperation while employing threats to discourage non-compliance. Besides this, President Trump, in his second term in 2025, is in a relatively early phase of transforming the rules of international relations in ways that are surprising for an isolationist president whose main concern is his ultra-nationalist voter base. He has used the threat of tariffs and the weaponization of trade to come down hard on everyone he believes is taking advantage of the US.
Rupture and Realignment of US-Pakistan Relations
Upon assuming office, President Trump’s primary initiative was to withdraw United States forces from Afghanistan. The relationship between the Trump administration and Pakistan deteriorated during the initial two years due to allegations that Pakistan provided refuge to militants, particularly Al-Qaeda. The Trump administration adopted a stringent and overtly confrontational stance towards Pakistan, which included reductions in foreign aid and support for measures to keep Pakistan on the “Grey list” for terrorism financing.
Nonetheless, President Trump acknowledged that a withdrawal from Afghanistan could not be achieved through military victory alone. Consequently, he required Pakistan’s assistance, while Pakistan perceived this as an opportunity to improve its relations with both the United States and the Afghan Taliban. Pakistan has positioned itself as a conduit between the United States and the Afghan Taliban peace process, leading to a new phase of reconciliation in the bilateral relationship between Pakistan and the United States. (Evaluating the Trump Administration’s Pakistan Reset | Brookings, n.d.)
The punitive Dimensions of trump policies
The previous administration approached its relationship with Pakistan through conditionality, but the Trump administration decisively shifted to a stronger stance. It suspended all security assistance to Pakistan until the country took substantive action against militants recognized as security threats to the USA. This suspension is not permanent and specifically excludes civilian assistance, as clearly stated by State Department spokesperson Heather Nauert.
In January 2018, Trump boldly asserted in a tweet, “The US has foolishly given 33 billion in aid over the last 15 years to Pakistan and they have given us nothing but ‘lies & deceit, thinking of us leaders as fools. They have given the terrorist a haven, which we hunt in Afghanistan with little help, no more!” (Bloch, 2018).
According to the Congressional Research Service, from 2002 onward, total aid assistance to Pakistan has amounted to $34 billion, with over $1 billion allocated in 2016 alone. This clearly underscores the significant financial support provided to Pakistan over the years.
Diplomatic and Economic Hardline Measures toward Pakistan
During the mid-2016s, U.S. policy toward Pakistan was increasingly shaped by congressional pressure. In the National Defense Authorization Act on Afghanistan, Senator John McCain introduced an amendment that sought to combine military pressure with political incentives — a strategy designed to impose costs on Pakistan while keeping the door open for cooperation. Around the same time, Senators Dana Rohrabacher and Ted Poe advanced Amendment 609, which, along with other proposals, placed Pakistan directly in the spotlight. These measures tied American defense funding to Islamabad’s progress in counterterrorism, particularly against the Haqqani Network. Failure to show “satisfactory progress” meant the risk of losing crucial financial support. The push went even further, with some lawmakers calling for Pakistan to be designated a state sponsor of terrorism or stripped of its major non-NATO ally status. The financial impact soon became clear: in 2016, Pakistan was slated to receive $900 million in reimbursements, but only $550 million was delivered. Congress blocked $300 million, and the Pentagon withheld another $50 million after the Secretary of Defense declined to certify Pakistan’s actions against the Haqqani Network. In total, Pakistan lost nearly $350 million, highlighting how political and security concerns directly translated into financial consequences.
Multilateral Pressure Via FATF
In 2018, the United States, along with the United Kingdom, France, and Germany, successfully pushed for Pakistan to be placed on the Financial Action Task Force (FATF) grey list due to its failures in addressing terror financing. This grey-listing imposed significant economic pressure by restricting Pakistan’s access to international finance and loans. FATF introduced a 34-point action plan that mandated essential reforms in Pakistan’s financial and legal systems. The decision was influenced by geopolitical factors, with the U.S. leveraging FATF pressure regarding Afghanistan and India, highlighting cross-border terrorism.
Notably, the move bypassed standard FATF procedures, revealing its political motivations. While this approach serves the interests of major powers, Pakistan continues to face structural challenges that impede its ability to fully comply with FATF demands. As a result, Pakistan remained on the grey list until October 2022.
Impact of “stick” policies on US-Pakistan relations
The Trump administration’s policies significantly impacted Pakistan’s domestic and foreign relations, fueling anti-American sentiment among elites due to criticisms and aid suspensions (Ali, 2025a). U.S. officials expressed frustration with Pakistan’s insufficient action against militant groups, while Pakistani leaders reiterated their dedication to regional peace and counterterrorism.
As tensions grew, Pakistan shifted its focus towards strengthening ties with China and Russia, moving away from reliance on the U.S. This shift was evident in the enhanced relationship through the China-Pakistan Economic Corridor (CPEC), which aims to drive investment and infrastructure development. Pakistan also pursued military cooperation with Russia. In response to the Trump administration’s business-centered approach, Pakistan sought to diversify its strategy and protect its interests in a Changing global landscape.
These two graphs figure ( 1.1) and ( 1.2) illustrate that the relations and trade volume of Pakistan with the USA did not decline. But Pakistan efficiently managed and diversified its economic and political relations with such countries. Although Pakistan has not detached itself from the USA, it’s quietly diversified its ties with other countries and reduced its dependency on the USA.
Afghan Peace Process as A Turning Point
After months of strained ties between the USA and Pakistan and a near-complete freeze on US security assistance in early 2018, the Trump administration has now gradually shifted toward conditional incentives, or “carrots,” to regain Pakistan’s cooperation regarding counterterrorism and the Afghan peace process. In July 2019, Prime Minister Imran’s visit to the USA was a pivotal moment that transformed the relationship into a dynamic and powerful partnership, paving the way for a new era of collaboration and mutual benefit. The USA had accepted Pakistan’s long-standing position that there is no military solution to the war in Afghanistan, and the USA should focus on recognizing the Taliban as a political entity in Afghanistan. Trump called for drastically strengthening trade ties between Pakistan and the USA and said the USA is the biggest destination of Pakistan’s exports. Moreover, July 2019: At a public rally in Houston, Trump referred to Imran Khan as a “great leader” and himself as a “friend” of Pakistan—an unmistakable shift in tone and signaling all-around diplomatic warmth. Trump also offered mediation between India and Pakistan over the Kashmir issue. Trump also said to Prime Minister Imran Khan that the USA has never been closer to Pakistan than the current administration of America. (Hashim, n.d.; “Pakistan–United States Relations,” 2025)
Strategic Re-Engagement in 2019: The “Carrot” Phase
During a meeting with Donald J. Trump in the Oval Office, Washington reopened the military aid plug to Pakistan within a week of Prime Minister Imran Khan’s visit. The Pentagon has approved $125 million in support for Pakistan’s F-16 jets, including monitoring with 60 U.S. contractors. It also proposed $670 million for India’s C-17 aircraft, seen as a signal of U.S. ties to both countries. Analysts say Imran Khan visited to encourage Pakistan’s help with the U.S. troop withdrawal from Afghanistan.
Resumption of the military aid program to Pakistan
The Trump administration has confidently resumed Pakistan’s participation in the US military training and education program, a vital part of the $2 billion security aid to the country. The International Military Education and Training (IMET) program allows foreign military officers to study at leading U.S. institutions.
Pakistan was suspended from IMET in July 2018 due to an abrupt directive issued by Trump, pressuring the nation to act against Islamic militants, which led to the cancellation of 66 opportunities for its officers. The U.S. military recognizes that these educational connections yield significant long-term benefits, and the Trump administration has acknowledged Pakistan’s crucial role in the peace process regarding the withdrawal of US forces from Afghanistan. (U.S. to Resume Military Training Program for Pakistan: State Department: R/Pakistan, n.d.)
Trump 2.0
By the end of Trump’s first term, U.S.-Pakistan relations shifted from punitive measures to reinstating the International Military Education and Training (IMET) program, highlighting Pakistan’s vital role in the U.S.-Afghan peace process. While promising, this new balance remains fragile and influenced by regional developments. The Biden administration shifted focus, viewing South Asia, particularly Pakistan, as less relevant after the U.S. withdrawal from Afghanistan. The emphasis on countering China in the Indo-Pacific impacted Pakistan, especially regarding its partnership with Beijing through the China-Pakistan Economic Corridor (CPEC). Upon Trump’s return to power in January 2025, discussions about U.S.-Pakistan relations were reignited. His second term, known as “Trump 2.0,” has prioritized strategic, transactional engagement, emphasizing mutual benefits in trade, security, and energy.
The Key Factor Behind Islamabad’s Success in Winning Over Trump
In March 2025, Pakistan decisively established a Crypto Council, appointing Bilal Bin Saqib as its minister. By April, the council boldly signed an agreement with World Liberty Financial, a company with significant backing from the Trump family. During a prominent crypto event in Las Vegas, Saqib praised Trump, acknowledging him as a pivotal supporter of the cryptocurrency sector. Moreover, General Asim Munir’s visit to the United States culminated in a productive lunch with Trump at the White House, taking place against a backdrop of rising tensions in the Middle East. The day after their meeting, Trump lauded Munir as “a very influential and great person.”
Additionally, a Pakistani official nominated Trump for the Nobel Peace Prize due to his instrumental role in brokering a ceasefire between India and Pakistan in their recent conflict. Besides that, Pakistani intelligence captured Sharifullah near the Pakistan-Afghanistan border, who was involved in a suicide bombing at Abbey Gate Airport, and extradited him to the US to face charges, which resulted in the deaths of 13 US troops and 170 Afghan citizens. On March 5, 2025, the Trump administration thanked Pakistan and described Pakistan as a “phenomenal” counter-terrorism partner.
Collaboration in the Economic, Security, and Energy sectors
In July 2025, Pakistan and the USA concluded a bilateral trade agreement, which Trump called a “historic” energy partnership, while Prime Minister Shabazz Sharif deemed it a “landmark deal. “The agreement was made amid shifting geopolitical dynamics in South Asia and rising trade tensions with India. It included the reduction of US import tariffs on key Pakistani exports like leather goods and textiles, while Pakistan eliminated a 5% digital services tax to facilitate access for US firms.
A notable aspect of the deal is the exploration of Pakistan’s oil reserves in Baluchistan and other regions, with Trump suggesting the possibility of selling this oil to India. The agreement also enhances the US-Pakistan cooperation on counter-terrorism, particularly regarding the Baluchistan Liberation Authority (BLA).
Strategic Bargain: Minerals, Leverage, and Diplomacy
Pakistan’s increasing significance during the early months of Trump’s second term (2025) goes beyond economic relations; it encompasses a broader strategic partnership. The recent surge in the US-China tariff conflict saw tariffs climb to 145% on each side. In reply, China pressured the US to reduce these tariffs by limiting exports of rare earth minerals, which are vital for electronics and aerospace industries. As a result, the U.S. is strategically aiming to diversify its supply chains and is now looking toward Pakistan, known for its large reserves of critical minerals. This shift is mainly driven by the potential of Pakistan’s mineral sector. Beyond natural resources, Pakistan’s location adds significant strategic value. Situated at the crossroads of the Middle East, Central Asia, and East Asia, Pakistan is well-positioned to support US efforts in limiting Iran’s nuclear ambitions and countering China’s expanding influence. The US might consider setting up air bases in Pakistan near the Iran border in Baluchistan to improve surveillance of Iran’s nuclear activities. However, this transactional approach could also entail diplomatic
expectations and concessions. Analysts suggest that the USA could pressure Pakistan to normalize relations with Israel, marking a notable change in its foreign policy.
Recommendations
Considering the U.S.’s growing interest in Pakistan’s minerals, it’s clear that numerous significant geopolitical challenges lie ahead. Pakistan is at a crossroads and should focus on developing robust, independent policies that do not overly rely on U.S. support. The strategic landscape mandates that the country aims to forge strong partnerships with other nations, such as China, the EU, and others, to prevent an overreliance on the U.S. Any inclination toward aligning more closely with the U.S. could jeopardize Pakistan’s relations with other crucial allies like Saudi Arabia and China, particularly in regions where there are substantial Chinese investments.
Moreover, minerals should be treated as powerful tools for strategic negotiations; they must not be handed over easily or without adequate consideration. Pakistan needs to establish clear, transparent, and open policies that not only attract foreign investment but also ensure that it retains control over its invaluable resources. The historical precedent set by the U.S. in resource-rich countries, such as Afghanistan and various parts of Africa, demonstrates that foreign involvement can often lead to conflict and instability. Therefore, Pakistan must invest in training initiatives and support systems for local miners, creating sustainable jobs and ensuring that resource extraction remains stable and responsible.
Conclusion
The US-Pakistan relationship has never been linear. Trump’s first term (2017–2021) emphasized punitive measures — aid suspensions and FATF grey-listing. Yet by his second term (2025), relations had evolved into a pragmatic, transactional partnership marked by trade deals, energy cooperation, and counterterrorism.
This shift underscores a broader truth: US-Pakistan ties are shaped less by trust than by circumstance. For Pakistan, the challenge is to convert short-term deals into long-term strategic advantage by leveraging its geography, resources, and partnerships. Success will depend on negotiating from strength, safeguarding sovereignty, and ensuring foreign engagement aligns with national interests.
References
This shift underscores a broader truth: US-Pakistan ties are shaped less by trust than by circumstance. For Pakistan, the challenge is to convert short-term deals into long-term strategic advantage by leveraging its geography, resources, and partnerships. Success will depend on negotiating from strength, safeguarding sovereignty, and ensuring foreign engagement aligns with national interests.
References
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