Pakistan–United States Relations: Minerals, Mediation & the Trump Era (2026 Update)

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Syllabus: Pakistan's External Affairs → United States — 40 marks Last checked: 19 October 2026 — recheck the proposed $10bn US exchange-stabilisation facility and the minerals projects. Related: Relations with the United States · Pakistan's Role in the US-China Trade War — 2026

1. In Simple Words

For seventy years, Pakistan–US relations have gone up and down like a roller coaster. Washington needed Pakistan during the Cold War, the Afghan jihad and the War on Terror, and dropped it each time the need ended. Pakistan often felt used; the US often felt Pakistan was playing a double game.

Under Trump's second term, the relationship has suddenly warmed. Trump hosted Field Marshal Asim Munir, praised Pakistan's role in the India ceasefire and the Iran mediation, and signed deals on critical minerals, trade and crypto. The big exam question: is this a real, lasting partnership based on economics, or just another short-term, transactional phase?

2. Background (Short)

1954–55 — Mutual Defence Assistance Agreement; Pakistan joins SEATO and the Baghdad Pact (CENTO)
1965 — US arms embargo during the war with India — Pakistan feels betrayed
1971 — Pakistan facilitates Kissinger's secret trip to China
1979–89 — Afghan jihad: massive US aid; after the Soviets leave, the Pressler Amendment (1990) cuts aid
1998 — Sanctions after the nuclear tests
2001–2021 — Pakistan becomes a frontline ally in the War on Terror; Coalition Support Funds; Kerry–Lugar Bill (2009); trust collapses after the 2011 Abbottabad raid and the Salala attack
2018 — Trump (first term) suspends security aid, accusing Pakistan of "lies and deceit"
2021 — US withdraws from Afghanistan; Biden keeps Pakistan at a distance

3. Timeline: The Trump-Era Warming

March 2025 — Pakistan hands over an ISIS-K suspect linked to the Kabul airport (Abbey Gate) bombing; Trump thanks Pakistan publicly
10 May 2025 — India–Pakistan ceasefire; Trump claims credit, Pakistan praises him (India rejects any mediation)
June 2025 — Trump hosts Field Marshal Asim Munir at a White House lunch — a first for a Pakistani army chief without a civilian leader
July 2025 — US–Pakistan trade deal: lower US tariffs on Pakistani goods and cooperation on oil reserves
September 2025 — $500m critical minerals framework between US Strategic Metals and Pakistan's Frontier Works Organisation; PM Shehbaz and Munir meet Trump and present mineral samples
January 2026 — MoU with an affiliate of World Liberty Financial (Trump family crypto business)
February 2026 — Pakistan joins the US Critical Minerals Ministerial; USTR opens a docket on a plurilateral critical minerals agreement
March 2026 — First shipments of rare earths, antimony and copper concentrate sent to the US
March–June 2026 — Pakistan mediates the US–Iran war: April ceasefire, Islamabad Talks, Islamabad MoU (17 June); Trump praises Shehbaz and Munir
August 2026 — Counterterrorism dialogue covering ISIS-K, al-Qaeda, the TTP and the BLA
20 August 2026 — Spat after US Ambassador to India Sergio Gor visits Indian-administered Kashmir
16 September 2026 — Munir receives a delegation of Powerus, a Trump-linked drone firm that also sells to India
September–October 2026 — Pakistan awaits a US decision on a proposed $10bn exchange-stabilisation facility

4. Current Situation (October 2026)

4.1 Economy and Minerals

Trade: about $11.5bn in goods and services in 2025, up 14%; the US is Pakistan's largest single export market
Target: $20bn trade in five years (FM Ishaq Dar)
Minerals: Pakistan claims mineral wealth worth trillions (copper, gold, lithium, antimony, rare earths); Reko Diq in Balochistan is the flagship test
Constraints:
- Insecurity in Balochistan
- No bilateral investment treaty with the US
- Weak contract enforcement and courts
- China's dominance in mineral processing

4.2 Security

Counterterrorism cooperation against ISIS-K and others has revived
The US designated the BLA and its Majeed Brigade as terrorist organisations (2025) — a long-standing Pakistani demand
US weapons left in Afghanistan now in militant hands remain a sore point

4.3 Diplomacy

Pakistan's mediation in the Iran war gave it new value in Washington
The US says ties with Pakistan do not come at India's expense (Rubio); India is uneasy about US–Pakistan warmth
Pakistan has to balance the US with China (CPEC, defence) and with Iran

5. Opportunities vs Challenges

Opportunities	Challenges
Critical minerals partnership and investment	Security and governance in mining areas
Largest export market; tariff relief; IT exports	Transactional, leader-driven ties that may not last beyond Trump
Diplomatic standing from the Iran mediation and the India ceasefire	US–India strategic partnership; China's concerns
Counterterrorism cooperation; financial support (IMF, possible facility)	History of mistrust; aid cut-offs and sanctions

6. Key Points to Remember

SEATO 1954, CENTO 1955; Pressler Amendment 1990; Kerry–Lugar 2009.
June 2025: Trump hosts Munir; July 2025: trade deal.
September 2025: $500m USSM–FWO minerals framework.
2025 trade: about $11.5bn.
Islamabad MoU: 17 June 2026 (Pakistan as mediator).

7. CSS Exam Perspective

7.1 Exam Angle

The US is named in the syllabus — expect a full question.
Best frame: "from security to economics?" — the relationship is trying to move from aid and counterterrorism to trade and minerals, but it is still transactional.
Always include the China balance and the India factor.

7.2 Likely Long Questions

Pakistan–US relations have always been transactional. Discuss in the light of recent developments.
Discuss the prospects of a Pakistan–US critical minerals partnership.
How can Pakistan balance its relations with the US and China?

7.3 Model Answer

Question: Pakistan–US relations have always been transactional. Discuss in the light of recent developments. (20 marks)

Outline

Introduction — thesis: transactional history, a chance for economic depth
Historical pattern of engagement and estrangement
Recent warming under Trump
Is it still transactional? Arguments both ways
Challenges
Way forward
Conclusion

Answer

1. Introduction

Pakistan–US relations have followed a cycle: close cooperation when Washington needs Pakistan, neglect or sanctions when it does not.
The Trump era has brought a sudden warming. Whether this time is different depends on whether economics, not only security, becomes the base.

2. Historical Pattern

Cold War alliances (SEATO, CENTO) → arms embargo in 1965.
Afghan jihad aid → Pressler sanctions in 1990.
War on Terror partnership → mistrust after 2011 and aid cuts in 2018.
Each phase was driven by a specific US need.

3. Recent Warming

Counterterrorism cooperation (ISIS-K suspect handover, CT dialogue).
Trump's engagement with Munir and Shehbaz; the trade deal of July 2025.
A $500m minerals framework and first mineral shipments (2025–26).
Pakistan's mediation in the Iran war earned Washington's praise.

4. Still Transactional?

Yes: the warmth is tied to US needs — minerals, Iran and counterterrorism — and to personal ties with Trump; it could fade with a new administration.
But possibly more: trade has reached about $11.5bn, the US is Pakistan's largest export market, and a minerals partnership could create long-term interests on both sides.

5. Challenges

US–India strategic partnership and India's objections
China's concerns about Pakistan's US tilt
Insecurity and weak governance in mineral-rich Balochistan
Domestic political instability and human-rights concerns raised in Congress

6. Way Forward

Build a broad-based economic relationship: a bilateral investment treaty, IT and agriculture exports, minerals with local processing
Institutionalise ties through regular strategic dialogues, not leader-to-leader deals alone
Keep the China relationship transparent; position Pakistan as a bridge
Improve security and contract enforcement to attract US investors
Use the Pakistani diaspora in the US as a lobby

7. Conclusion

The relationship is still largely transactional, but for the first time there is a chance to anchor it in trade and investment rather than aid and war.
If Pakistan can deliver security and a better business climate, the Trump-era warmth could become a durable partnership.

7.4 Past-Paper Style MCQs

Pakistan joined SEATO in:
- (A) 1950
- (B) 1954
- (C) 1959
- (D) 1965
- Answer: (B). Pakistan joined SEATO in 1954 and the Baghdad Pact (later CENTO) in 1955.
The Pressler Amendment, which cut US aid to Pakistan, was applied in:
- (A) 1979
- (B) 1985
- (C) 1990
- (D) 1998
- Answer: (C). It was passed in 1985 and applied in 1990, when the US President could no longer certify that Pakistan had no nuclear device.
The Kerry–Lugar Bill (2009) promised Pakistan:
- (A) $1.5bn a year in non-military aid for five years
- (B) F-16 jets
- (C) A free trade agreement
- (D) A civil nuclear deal
- Answer: (A). It tripled non-military aid to $1.5bn a year (total$ 7.5bn), with conditions that caused controversy in Pakistan.
The $500m critical minerals framework of September 2025 was signed between US Strategic Metals and:
- (A) WAPDA
- (B) Frontier Works Organisation
- (C) OGDCL
- (D) Saindak Metals
- Answer: (B). The Frontier Works Organisation (FWO), a military engineering organisation, signed with USSM.

7.5 MCQ Traps

The Pressler Amendment was passed in 1985 but applied in 1990.
SEATO (1954) ≠ CENTO / Baghdad Pact (1955).
India rejects US mediation; the US claim of brokering the May 2025 ceasefire is disputed by India.

7.6 Self-Test

Describe the "engagement and estrangement" cycle in Pakistan–US relations.
What makes the Trump-era warming different?
Why is Reko Diq a test case for US investment?
How should Pakistan balance the US and China?