For decades, the alliance between the United States and Pakistan revolved around security cooperation and development aid.
However, in recent years, this alliance has undergone a crucial transformation—moving from dependency to focused strategic collaboration in economic sectors such as energy, mining and technology. Both countries, it seems, are eager to redefine their engagement in line with emerging global priorities and national interests.
Last month, US President Donald Trump expressed interest in enhancing collaboration with Pakistan on critical minerals, calling it a “strategic priority” that could benefit both countries. The announcement came even before China’s latest restrictions on rare earths exports, the latest salvo in the superpowers’ trade war.
Washington’s recalibration of trade and tariff policies haven’t hurt Pakistan as much as others. Pakistan is now enjoying a favorable 19% tariff on imported goods—the lowest among South Asian nations and far below the punitive 50% tariffs currently imposed on its neighbor and rival, India.
Pakistan’s untapped potential
Despite its abundant mineral reserves, the mining sector currently contributes only 3.2% to Pakistan’s GDP and a mere 0.1% to global exports. Islamabad is now laser-focused on unlocking this largely untapped potential.
Pakistan is home to one of the world’s largest porphyry copper-gold deposits, with the Reko Diq site in southwestern Balochistan alone estimated to contain about 5.9 billion tons of ore.
Barrick Gold, which holds a 50% share in the Reko Diq project, describes it as one of the biggest undeveloped copper-gold assets globally. The project’s development is expected to inject much-needed confidence and revenue into the economy, potentially catalyzing regional industrial growth.
US intelligence agencies briefed President Trump that Pakistan’s rare earths mineral deposits are estimated to be worth between $4-5 trillion. The reserves are primarily located in Khyber Pakhtunkhwa and Balochistan. This discovery highlights Pakistan’s significant potential in the global rare earths market, which is crucial for various high-tech industries worldwide.
In September, the United States and Pakistan signed a memorandum of understanding on critical minerals. Zach Harkenrider, acting deputy chief of the US Embassy in Islamabad, and a delegation from the Missouri-based US Strategic Metals (USSM) signed the MoU with Pakistan’s Frontier Works Organisation at the Prime Minister’s House.
At the signing, US Charge d’Affaires Natalie Baker called it “another example of the strength of the US-Pakistan bilateral relationship that will benefit both countries.” “We look forward to seeing future agreements between US companies and their counterparts in the critical minerals and mining sector in Pakistan,” she said.
Emphasizing the importance of such agreements, Baker said the Trump administration has made such deals a key priority given the importance of critical mineral resources to American security and prosperity.
USSM, meanwhile, focuses on producing and recycling critical minerals that the US Energy Department defines as vital for manufacturing and energy production.
Trust and momentum
The US also announced a $500 million USSM investment, while Islamabad actively promoted US interest in its oil and gas sector, following Trump’s remarks about Pakistan’s “massive oil reserves.” Despite a history of fluctuating security relations, the two sides are now shifting toward deeper economic engagement.
At the same time, the two sides are steadily reviving their military and economic relations after years of tension. During a recent meeting with Trump, Prime Minister Shehbaz Sharif and army chief Field Marshal General Asim Munir received public praise, signaling a renewed spirit of cooperation.
Pakistan also credited Trump with helping to end a four-day conflict with India in May 2025. Islamabad even nominated him for a Nobel Peace Prize for his role in defusing tensions between India and Pakistan, further strengthening its shifting perception of Washington as a constructive partner.
To capitalize on this renewed trust, Pakistan’s Finance Minister Muhammad Aurangzeb told Bloomberg News in Islamabad that the government plans to host an investment conference at the end of October to attract American investment in particular. “We are very clear where we seek their investment and where we see a clear investment appetite,” he said.
Pakistan’s leadership appears determined to break from the boom-and-bust cycles that have defined its economy for decades. After narrowly avoiding default in 2023 through IMF assistance, the country is gradually stabilizing under a $7 billion IMF loan program.
The government now aims to turn that stability into sustainable growth by focusing on exports, mineral development, and foreign direct investment.
Strategic transactionalism
For Washington, Pakistan offers a strategically located partner at the crossroads of South and Central Asia—one that can play a crucial role in diversifying supply chains away from China. For Islamabad, this partnership provides access to advanced technology, technical expertise and new investment that could modernize its energy and mining infrastructure.
The transformation of the US-Pakistan relationship is not only transactional but also reflects a strategic convergence where economic cooperation and geopolitical interests align. The two countries are moving from mere military alliances to mineral and energy partnerships, paving the way for a more equal and mutually beneficial relationship.
If successfully managed, this partnership could not only revitalize Pakistan’s economy but also position it as a key player in the intensifying global race for strategic resources—a transformation that may define the next chapter of Pakistan-US relations and a new era of mineral supply chains.
Saima Afzal is an independent and freelance researcher specializing in South Asian security, counter-terrorism, the Middle East, Afghanistan and the Indo-Pacific region. Her work focuses on geopolitical developments, strategic affairs and regional conflict dynamics. She holds a master’s in philosophy in peace and conflict studies from the National Defence University Islamabad, Pakistan.
