The United States and Pakistan have one of the world’s most complicated relationships. Years of close cooperation have alternated with decades of alienation, even bitterness.
Unlike previous engagements, driven mostly by temporary security needs, this reset is founded on economic interests. Recent months have generated significant diplomatic and economic momentum. Beyond traditional trade, bilateral cooperation is expanding into digital finance and crypto-currency, aimed at modernising Pakistan’s economy and leveraging its global diaspora.
Pakistan will need to balance its relations with the United States and China. An overarching strategic goal for the US is to counter China’s global influence. Meanwhile China remains Pakistan’s most steadfast ally and largest investor through the China-Pakistan Economic Corridor. Pakistan thus cannot and will not join any anti-China coalition.
In the wake of a notable warming in relations with Washington, senior Pakistani strategists are articulating a vision that is pragmatic, interest-based, and leverages Pakistan’s unique geopolitical position.
Pakistan-China and Pakistan-Africa Institute for Development and Research chairman Mushahid Hussain Sayed sees Pakistan as a pivotal player. The former federal minister argues that Pakistan’s leverage stems from three key assets: its potential as a resilient country; its role as a net security provider in the Muslim world; and its ability to capitalise on US-India frictions and a potential US-China thaw. “Pakistan is a credible key player through ‘ingress, impact, influence and trust’ in Riyadh, Tehran, Beijing, Moscow and Washington,” says Mushahid.
The framework for cooperation with President Trump’s America, he suggests, is built on three C’s— crypto, critical minerals and counterterrorism. “The pragmatic agenda goes beyond traditional security assistance. The Reko Diq copper-gold project is cited as a cornerstone of economic interaction, securing US supply chains while generating crucial revenue for Pakistan. The push for crypto adoption is seen as a tool to address economic crises through enhanced remittances.”
On security, the partnership is increasingly reciprocal. Pakistan seeks “sustained US support against terrorist groups like the ISIS-K and the TTP but has also demonstrated its value as a reliable partner.” Mushahid says Pakistan’s arrest of the August 2021 Abbeygate Kabul Airport bombers built goodwill with the Trump administration, proving Pakistan’s reliability as a counterterrorism ally.
This shift is underpinned by a re-assessment of the regional landscape. “Singular reliance on India as a regional counterweight to China has given way in the US strategic thinking to a more nuanced approach, as Trump has de-prioritised bilateral security partnerships.” Mushahid says the current environment allows the US to pursue balanced ties with both Islamabad and New Delhi, reducing zero-sum dynamics, unlike the pro-India tilt under Obama and Biden.”
Crucially, Mushahid argues, there is going to be a coming recalibration in the most critical relationship of all: that between the US and China. He views President Trump as “transactional, not a Cold War warrior, who recognises the limits of a trade war. He says he feels that a deal will be clinched between Trump and Xi Jinping. This will be followed by an exchange of visits between the two leaders in 2026. “I foresee a US-China thaw in 6 to 12 months as domestic priorities dominate Trump’s agenda, certainly not a new Cold War against China,” he says. This will be reflected in the new US national security strategy. Such a détente will allow Pakistan to leverage its alliances with both powers.
For this new strategy to succeed, Mushahid insists, economic stability is going to be the bedrock of national security. He and other experts advocate for a partnership where US investment in projects like Reko Diq and support through multilateral institutions helps to fuel a geo-economic transformation in Pakistan. By balancing its tactical ties with Washington against its strategic partnership with Beijing, Pakistan aims to leverage diplomacy for sustainable development, transforming a transactional reset into a more stable and enduring engagement.
As Pakistan attempts a geopolitical balancing act to secure its economic future, the US-China rivalry is taking centre stage with Presidents Xi Jinping and Donald Trump’s summit on the sidelines of the APEC summit on October 30 in Busan, South Korea.
Pakistan finds itself at a critical crossroads, navigating the complex US-China competition, which presents both significant challenges and unique opportunities for its foreign policy. This dynamic requires careful calibration of strategic partnerships, economic dependency and regional security considerations.
Pakistan’s former ambassador to China, Naghmana Hashmi, says that Beijing’s calm amid US tariff escalations shows foresight and fortitude. Trump’s Trade War 2.0 hiked duties on Chinese imports to an average 36.8 points above pre-2025 levels—targeting EVs at 100pc, semiconductors at 50pc, and more—echoing the 20180-2020 clashes that cost the US $316 billion. China, however, had anticipated this.
“Tariffs are tools of pressure, not paths to prosperity,” she observed, noting Beijing’s preemptive “dual circulation” push for self-reliance, rerouting $100 billion in exports via Vietnam and Mexico by late 2024. Retaliatory measures—34pc levies on US agricultural goods in March, rare-earth controls—were phased to minimise fallout, limiting GDP impact to 0.2pc in early 2025. Xi sought phased reductions, chip export relief and sanction shields for Belt and Road. “Beijing entered as steward of an $18 trillion engine,” she noted, leveraging Trump’s deal hunger for “win-win” gains without core concessions. This maturity sustained a $575 billion bilateral trade. As Trump arrived in South Korea with roaring tariffs, China’s quiet confidence echoed the loudest.
As the US navigates this complex rivalry with China, it is also seeking to diversify its supply chains and build new economic partnerships. This strategic need is enabling Pakistan to make waves in the world of mineral extraction, says Ambassador Hashmi. “This move marks another high point in Pakistan-US commerce, opening doors to fresh investments and trade.” Balochistan and Khyber Pakhtunkhwa hold huge reserves of antimony and copper.
Lately, the US has shown great interest in strategic minerals, leading to a $500 million deal with American company, US Strategic Metals. Pakistan has already sent its first cargo of these minerals to US ports. American leaders see this growing to $2 billion funding over the next five years. Progress on this front has accelerated following a series of high-level visits from Washington, including delegations from the Department of Energy and US Commerce Secretary Gina Raimondo in March.
During those talks, Pakistan’s geological potential was highlighted as a potential game-changer for diversifying global supply chains. Hashmi sees this agreement as a “historic milestone” in US-Pakistan relations, one that could secure steady US supplies for critical technologies like batteries and semiconductors.
It is crucial to distinguish these important minerals from the specific critical metals, such as rare earths for permanent magnets, whose constrained supply from China is the primary source of US strategic anxiety. Pakistan kept China in the loop, says Hashmi. This was reflected in China’s foreign diplomatic reaction. Foreign Ministry spokesperson Lin Jian said it had no “connection” to China’s export controls. He also acknowledged Pakistan’s right to “balance” its international partnerships.
Pakistan finds itself at a critical crossroads. Navigating the complex US-China competition presents both significant challenges and unique opportunities for its foreign policy. This dynamic requires careful calibration of strategic partnerships, economic dependencies and regional security considerations. While the US has traditionally been a major trading partner, the growing economic ties with China are reshaping this relationship, argues Hashmi. The deepening of Pakistan-China relations, particularly through CPEC, has provided critical economic support and infrastructure development.
The influx of Chinese investment through CPEC has delivered much-needed capital, facilitated technological transfers and contributed directly to Pakistan’s economic growth, thereby altering its foreign policy calculus. The US interest in Pakistan’s mineral wealth could provide a crucial ‘prosperity anchor’ for the latter’s economy. Experts advocate a partnership combining direct US investment in projects like Reko Diq with support from multilateral institutions.
Enhanced regional security will also benefit China.
As Pakistan forges a new US partnership centred on mineral exports while maintaining its crucial alliance with China, it aims to leverage its geopolitical position for economic gain. The success of this balancing act could transform Pakistan from a dependent ally into an independent, pivotal state, breaking its historic cycle of volatile superpower relationships to achieve lasting stability.
The writer is a senior The News staffer in Karachi.