Washington: Just a day after celebrating a “landmark” energy partnership with Pakistan, U.S. President Donald Trump imposed a 19% tariff on Pakistani goods as part of his sweeping “Liberation Day” executive tariff order, which targets dozens of trading partners worldwide. The new tariffs are set to take effect from August 7, 2025, at 12:01 a.m. Washington time.
Oil Deal, Then Tariff Slash
Earlier this week, Trump announced a preliminary energy deal with Pakistan focused on the joint development of what he termed “massive unexplored oil reserves” in the country. The move was seen as an attempt to realign energy partnerships in South Asia and reduce Pakistan’s dependence on the Middle East.
“This is a significant beginning to a long-term energy partnership,” Trump wrote on Truth Social, adding that the U.S. could help Pakistan eventually export oil to India.
As part of the agreement, Pakistan will start importing U.S. West Texas Intermediate (WTI) crude oil, marking a notable shift in its energy strategy.
According to Reuters, Cnergyico, Pakistan’s largest refiner, is set to import 1 million barrels of WTI crude in October through the global trader Vitol, confirmed by vice chairman Usama Qureshi.
Tariff Rate Lowered After Deal
While Pakistan had earlier been facing a steep 29% tariff, the finalized executive order shows the rate reduced to 19%, indicating that the oil deal played a role in softening trade penalties.
The updated tariff list, part of Trump’s aggressive trade push, was issued Thursday evening and affects 68 countries and the European Union, with varied rates determined by trade imbalance and strategic considerations.
Broader Global Tariff Overview
- India: 25%
- Taiwan: 20%
- South Africa: 30%
- Thailand, Cambodia, Philippines, Indonesia: 19%
- Vietnam: 20%
- Switzerland: 39%
- Unlisted countries: Minimum 10%
Any goods suspected of being transshipped to evade higher tariffs will face additional levies, as per the White House.
Ambiguity Around ‘Massive Reserves’
It is unclear which reserves Trump referred to, as Pakistan has limited proven oil fields and no recent discovery of major reserves. The U.S. president has not named any oil companies or provided timelines for the proposed energy partnership.
Still, analysts believe the deal could help revive interest in Pakistan’s underexplored basins, especially with U.S. technical involvement.
Strategic Trade or Symbolic Move?
Experts say that Trump’s dual move—an energy deal followed by a tariff—reflects a transactional approach to diplomacy, where economic benefits and penalties go hand-in-hand.
Whether this is the start of real long-term U.S. investment in Pakistan’s energy sector, or merely a strategic maneuver to gain leverage over India and China, remains to be seen.
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