Pakistan And US Reach A Trade Agreement To Develop Oil Reserves And Reduce Tariffs

Economic

Political

Summary:

The United States and Pakistan reached a trade agreement expected to allow Washington to help develop Pakistan’s largely untapped oil reserves and lower tariffs for the South Asian country, officials from both nations said Thursday.Officials did not specify where the exploration would take place, but most of Pakistan’s reserves are believed to be in the insurgency-hit southwestern province of Balochistan, where separatists say the province’s natural resources are being exploited by the central government in Islamabad.

“We have just concluded a deal with the country of Pakistan, whereby Pakistan and the United States will work together on developing their massive oil reserves,” U.S. President Donald Trump wrote on his Truth Social platform.“We are in the process of choosing the oil company that will lead this partnership,” Trump added. “Who knows, maybe they’ll be selling oil to India someday!”Total U.S. trade with Pakistan was an estimated $7.3 billion in 2024, according to the Office of the United States Representative, which said on its website that U.S. exports to Pakistan in 2024 were $2.1 billion, up 4.4% ($90.9 million) from 2023. U.S. imports from Pakistan totaled $5.1 billion in 2024, up 4.9% ($238.7 million) from 2023, it said.

There was no immediate comment from the Baloch nationalists and separatist groups. Balochistan has long been the center of violence mostly blamed on groups including the outlawed Balochistan Liberation Army, or BLA, which the U.S. designated a terrorist organization in 2019.Separatists in Balochistan have opposed the extraction of resources by Pakistani and foreign firms and have targeted Pakistani security forces and Chinese nationals working on multibillion-dollar projects related to the China-Pakistan Economic Corridor.

Oil reserves are also thought to exist in the southern Sindh, eastern Punjab and northwestern Khyber Pakhtunkhwa provinces.Pakistan's Prime Minister Shehbaz Sharif welcomed the “long-awaited” deal and thanked Trump for playing a key role in finalizing it.Pakistan had been pursuing a trade agreement since May, when Trump mediated a ceasefire between Pakistan and India following an escalation triggered by Indian airstrikes on Pakistani territory in response to the killing of 26 tourists in Indian-controlled Kashmir.

Pakistan’s Finance Ministry said in a statement early Thursday the agreement aims to boost bilateral trade, expand market access, attract investment and foster cooperation in areas of mutual interest.The breakthrough came during a meeting in Washington between Pakistani Finance Minister Muhammad Aurangzeb and senior U.S. officials, including Commerce Secretary Howard Lutnick and Trade Representative Ambassador Jamieson Greer.

Source: Yahoo Finance

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Gerik

Economic

From MVNO to Multipurpose Platform: What Trump Mobile Offers

Trump Mobile is operating as a mobile virtual network operator (MVNO), meaning it leases bandwidth from existing major telecoms like Verizon or AT&T. The wireless service will come bundled with roadside assistance, telemedicine subscriptions, and device insurance. The $499 flagship smartphone, dubbed the T1, is branded “Designed and built in the United States,” though later clarifications suggest only partial domestic assembly due to global supply chain constraints.

Bundled service providers include:

Doctegrity for telehealth consultations and prescription access

Drive America for roadside assistance

Omega Mobile Care for device insurance

VMed Mobile, a wellness device and tracking platform with links to Shenzhen, China-based certification

The bundling strategy is positioned to appeal to “hardworking Americans” by combining essential services into a single monthly package.

Behind the Scenes: Interconnected Web of Ownership

The management and operations are deeply entangled with Liberty Mobile a network co-owned by Trump Mobile’s founding team (Pat O’Brien, Don Hendrickson, and Eric Thomas). Liberty Mobile has been registered since 2018, but remains largely low-profile, offering older devices and placeholder content on its website. Most customer-facing services are sourced from ventures either owned or co-owned by the trio.

Pat O’Brien’s Ensurety Ventures provides several of the key bundled services. O’Brien confirmed to Reuters that the T1 phone will run Android and is targeted to ship by October 2025. The $100 "waitlist" fee signals a crowdfunding-style pre-order strategy, though no actual pre-order numbers were disclosed.

Notably, on launch day, Trump Mobile’s support line mistakenly routed to Omega Auto Care, a car warranty firm under O’Brien’s umbrella highlighting operational chaos amid the company’s fast rollout.

Challenges in Domestic Manufacturing and Transparency

Initially marketed as an American-made device, the T1 faced immediate scrutiny. Experts pointed out that U.S.-based smartphone manufacturing would significantly drive up costs. In response, the website softened its language, stating the goal is to source as many components as possible domestically.

This pivot underscores both the political marketing appeal of “Made in America” and the hard limits of executing such claims in a global tech supply chain. The company’s vague communication around specifications and supply partners raises further doubts about scalability and competitiveness.

Trump’s Post-Election Business Blitz

Trump Mobile joins a growing roster of Trump-branded ventures since Donald Trump's reelection. These include:

A Trump-branded Bible

A cryptocurrency exchange and meme coin ecosystem (World Liberty Financial and $TRUMP coin)

A stablecoin (USD1)

12 overseas real estate deals

Together, they represent a post-election shift toward monetizing Trump’s political capital across multiple industries, often leveraging patriotic themes, alternative finance, and service bundling.

Trump Mobile’s launch reflects an aggressive and ideologically charged commercial strategy, repackaging telecom access with health and car support in a single platform. However, early signs such as operational misfires, opaque manufacturing claims, and reliance on interconnected ventures signal risk of overextension. Still, for Trump’s base, the service may find success as a values-driven alternative telecom provider, even if its market impact remains uncertain in the face of established MVNO competition and skeptical consumer segments.

Source: Bloomberg

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Glendon

Economic

Forex

Brazil estimates that 35.9% of its exports to the United States, by value, will be hit by a steep 50% tariff under an executive order issued on Wednesday by the Trump administration, two sources familiar with the matter told Reuters.

According to the sources, who spoke on condition of anonymity, the Ministry of Development, Industry, Trade and Services, which is leading trade negotiations with the U.S., is expected to unveil the figure later in the day.

Trump slapped the 50% tariff to fight what he has called a "witch hunt" against former President Jair Bolsonaro, but softened the blow by excluding sectors such as aircraft, energy and orange juice from heavier levies.

The Brazilian government will also report that another 44.6% of local products will be subject to the preexisting 10% tariff, while the remaining 19.5% will fall under tariffs the U.S. applies globally, ranging from 25% to 50%, added the sources.

The MDIC did not immediately respond to a request for comment.

Source: Yahoo Finance

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Gerik

Economic

Strategic Energy Cooperation: A New Frontier for U.S.–Pakistan Ties

The centerpiece of the agreement is U.S. participation in exploring and developing Pakistan’s domestic oil reserves, with discussions already underway to identify the leading American energy firm for the project. While the deal does not specify the exploration zones, it is widely expected to include Balochistan—a region rich in hydrocarbons but marred by separatist unrest and historical underdevelopment.

President Trump’s remarks, notably referencing the potential to export Pakistani oil to India, underscore the geopolitical undertones of this arrangement. The United States appears to be re-engaging with South Asia by using energy diplomacy to both stabilize Pakistan’s economy and counterbalance Chinese influence stemming from the China-Pakistan Economic Corridor (CPEC).

Tariff Reductions and Trade Expansion: A Win for Pakistan’s Exporters

The agreement also includes mutual tariff reductions, with a particular emphasis on improving Pakistan’s export access to the U.S. market. Pakistan’s total trade with the U.S. stood at $7.3 billion in 2024, with exports reaching $5.1 billion. The new deal is expected to accelerate this momentum, especially for key sectors such as textiles, agriculture, and light manufacturing.

Pakistan’s Finance Ministry hailed the deal as a mechanism to attract U.S. investment, widen market access, and stimulate broader cooperation. Finance Minister Muhammad Aurangzeb’s successful negotiations in Washington signal Islamabad’s efforts to reposition itself as a reliable economic partner amid regional instability.

Security and Resource Control: Balochistan's Fragile Context

While the deal promises economic benefits, it may reignite tensions in Balochistan. The region has a long history of resisting central government control, and militant groups like the Balochistan Liberation Army (BLA) have targeted foreign workers and energy projects in the past. Though these groups have not yet commented, the risk of unrest could complicate on-ground implementation.

Nonetheless, the broader energy development effort also includes potential reserves in Sindh, Punjab, and Khyber Pakhtunkhwa—provinces that offer relatively more stable conditions for foreign investment.

Ceasefire Diplomacy and Regional Balancing

This agreement follows Trump’s intervention in mediating a ceasefire between Pakistan and India in May 2025, after tensions escalated due to the killing of Indian tourists in Kashmir. The U.S. move to secure Pakistani cooperation on energy and trade shortly after indicates a calibrated strategy to leverage diplomacy into long-term economic engagement.

Prime Minister Shehbaz Sharif called the trade pact “long-awaited” and praised the U.S. for its proactive role. The timing reflects Pakistan’s urgency to stabilize its external accounts and improve investor confidence, especially amid pressure from the IMF and volatile regional security dynamics.

The U.S.–Pakistan trade deal marks a significant evolution in bilateral relations, pivoting toward energy development and trade facilitation. While it offers a lifeline to Pakistan’s struggling economy and a fresh investment avenue for U.S. firms, its success hinges on how well Islamabad manages internal security and whether both sides can translate political goodwill into operational progress. With energy security, regional stability, and economic reform at stake, this agreement may prove to be a defining moment for South Asia’s geopolitical realignment.

Source: Reuters

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Michelle

Economic

Political

President Donald Trump’s move to penalize India for buying oil and arms from Russia will increase economic risks for the South Asian nation and test its longstanding ties with Moscow.

Trump said on July 30 he will impose a 25% tariff on Indian exports to the US and add an undefined penalty for New Delhi’s energy and military purchases from Russia. The threat came a day after Trump shortened Russia’s deadline to reach a truce with Ukraine.

Washington and its partners see India’s purchases of Russian energy as a form of tacit support for Moscow that weakens the impact of the sanctions they’ve imposed in response to Russia’s invasion of Ukraine.

“I don’t care what India does with Russia. They can take their dead economies down together, for all I care,” Trump said in a Truth Social post a day after announcing the India tariff.

India has had a strong and stable relationship with Russia over the last seven decades. India’s External Affairs Minister Subrahmanyam Jaishankar has referred to it as the one constant in global politics over the last half century.

The long-standing relationship has its roots in the Cold War era, when India maintained cordial relations with Moscow as the US moved closer to India’s arch-rival Pakistan. Despite New Delhi’s avowed non-alignment with either of the era’s two superpowers, Washington’s backing of Pakistan in its 1971 civil war that led to the independence of Bangladesh drew New Delhi closer to Moscow. The ties between India and Russia deepened over the next three decades as they collaborated in critical areas such as space, nuclear energy and defense.

As India’s relations with Washington began to improve in recent decades, it’s reduced its overwhelming reliance on Russian weapons by acquiring more arms from the US and European nations. Prime Minister Narendra Modi has maintained India’s longstanding ties to Moscow, while pursuing deeper links with the US, which it sees as a partner in standing up to a more assertive China.

After Russian forces invaded Ukraine and Western nations tightened sanctions on Moscow, India began buying large volumes of Russian oil. India has stood out among major democracies for its reluctance to criticize Russian President Vladimir Putin, and has abstained from United Nations votes condemning his war in Ukraine. It has also refused to participate in punitive measures against Russia.

Modi maintains close ties with the Russian leader, having visited the country in October. Putin is scheduled to visit India later this year.

Trade between India and Russia reached a record high of $68.7 billion in the year to March 31. India’s exports to Russia were worth $4.9 billion and its imports from Russia amounted to $63.8 billion.

Russia’s biggest investments in India are in oil and gas, petrochemicals, banking, railways and steel, while Indian investments in Russia focus mainly on oil, gas and pharmaceuticals.

India, the world’s third-largest oil consumer, buys about 35% of its crude oil from Russia, up from just 1% before the full-scale invasion of Ukraine. The South Asian nation has become hooked on Russian seaborne crude oil because it comes at a discount to market rates.

India traditionally relied on suppliers from the Middle East, such as Saudi Arabia, to meet its oil requirements. Shifting away from Russian oil would push India back to those Middle Eastern suppliers, which would likely lead to an increase in the cost of imports.

Russia is the largest supplier of weapons for India, according to a March report from the Stockholm International Peace Research Institute, an independent think tank that studies global weapon sales. India has purchased fighter jets, battle tanks and missiles from Russia and the two countries also formed a joint venture to produce Kalashnikov assault rifles for India’s armed forces.

India — the world’s second-biggest arms importer — has slowly been reducing its dependence on Russian weapons in recent years. There have been no new major arms deals with Russia for the last few years, and India’s push to diversify looks set to continue after delays in the delivery of Russian S-400 air defense systems.

Many of India’s weapons now come from the US. India has contracted at least $24 billion worth of US-origin defense articles, according to a 2025 US Congressional report. Major purchases include attack helicopters, transport aircraft and howitzers, according to the report. More weapons sales are being considered, including of anti-submarine warfare, communication and land-attack equipment, the report said.

“Since 2008, defense trade has emerged as a major pillar of the US-India security partnership, and bilateral military exercises across all services are now routine,” the report said.

Economists say any shift away from trading with Russia would have implications for India’s inflation and economic growth. Standard Chartered Plc estimates that a 100% pivot from Russian oil could increase India’s annual import bill by $4 billion to $6.5 billion.

If India stops buying oil from Russia and higher fuel prices are passed on fully to consumers, inflation would be 3-5 basis points higher, Standard Chartered’s economist Anubhuti Sahay wrote in a report. The impact on India’s economic growth would be muted, she said, with an estimated decline of about 4-5 basis points.

“While the macro impact of such a shift appears manageable on a standalone basis, the actual impact would depend on how crude oil prices reacted to lower Russian crude oil supply globally,” she said.

The strong India-Russia relationship has often frustrated officials in Washington, who have sought to foster closer ties with New Delhi as a strategic counterweight to China. India’s government said in a statement it’s committed to a bilateral trade deal with the US, but didn’t address Trump’s threat to penalize it over its energy and defense purchases from Russia.

According to an analysis by Bloomberg Economics, the stakes are high for both Delhi and Washington. “Trump’s move to link arms and energy imports from Russia with trade talks is likely to inject fresh friction into the relationship, especially coming after the recent conflict with Pakistan,” Chetna Kumar and Abhishek Gupta wrote in a report.

A prolonged impasse could strain ties and slow progress on defense and tech coordination between the two countries, particularly in countering China’s growing influence, they wrote.

Source: Bloomberg Europe

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Gerik

Economic

A Deal of Necessity: Worst-Case Scenario Avoided

The 15% tariff level, though steep, is seen by South Korean officials and economists as a “second-best” outcome that avoids deeper disruption. Kathleen Oh of Morgan Stanley described it as a relief that removes Korea-specific tariff risk, placing South Korea on even footing with export rivals in the U.S. market, particularly in the auto sector. The Bank of Korea is now expected to revise growth forecasts upward, supported by both the trade clarity and domestic housing market stabilization.

Former trade minister Cheong In-kyo echoed this sentiment, emphasizing that while the tariff isn’t ideal, it opens strategic investment channels for Korean firms looking to expand in the U.S. particularly as Chinese firms face mounting barriers. The trade agreement, in effect, may allow South Korean manufacturers to fill supply chain gaps in the U.S. amid global reshuffling.

Corporate Optimism and Strategic Recalibration

Major South Korean conglomerates responded with guarded optimism. Hyundai Motor Group used the opportunity to reaffirm its $21 billion investment pledge, in addition to $20.5 billion already committed. It emphasized job creation and confidence in long-term U.S. operations, seeing the deal as validation of its positioning in the American market.

Samsung Electronics, meanwhile, maintained a cautious tone. CFO Park Soon-cheol acknowledged that the deal reduces uncertainty but emphasized that Samsung is closely watching how implementation unfolds. This measured response suggests Korean firms remain wary of potential hidden costs or shifting regulatory conditions under Trump’s administration.

Political Scrutiny Over Concessions and Execution

While business leaders and markets may breathe easier, political voices within South Korea urged closer inspection. Former diplomat and now opposition lawmaker Kim Gunn warned that while the headline agreement appears fair, “the devil is in the details.” He raised concerns over possible excessive concessions and called for a deeper review to determine whether the agreement maintains parity with competitors like Japan and Taiwan.

This aligns with broader skepticism about the long-term benefits of the $350 billion investment figure. Cheong In-kyo noted that the value of the deal hinges on where and how those funds are deployed. If the capital flows mainly into U.S. infrastructure or labor markets without reciprocal benefits for Korean firms, Seoul’s bargaining position could appear weaker in hindsight.

South Korea’s trade pact with the Trump administration brings short-term market relief and strategic opportunities for its global firms, especially in autos and tech. However, the true efficacy of the deal depends on follow-up negotiations, transparency in investment allocations, and whether the concessions made serve Korea’s long-term industrial and geopolitical interests. For now, while Trump scores a domestic political win, South Korea must balance its economic pragmatism with vigilance over execution and evolving U.S. trade policy.

Source: Reuters

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Gerik

Economic

Forex

U.S. Dollar's Revival Forces Global Asset Reassessment

Investor expectations that President Trump’s tariffs and heavy borrowing would eventually derail the U.S. dollar and stock market have proven premature. Instead, the dollar index is now at a two-month high and set for a 3% rise in July its first monthly gain of the year helped by solid U.S. data and reduced odds of imminent Fed rate cuts. This reversal is eroding confidence in the so-called “rest of the world” trade, which had boosted European and emerging market equities and currencies.

The euro, once the standout performer in the first half of 2025, is now facing its worst monthly performance in over two years, slipping below $1.15. Meanwhile, the British pound and emerging market equities have also come under pressure, and gold once the top-performing asset of the year is seeing its first three-week losing streak since November, hovering around $3,300 per ounce.

Rotation into U.S. Assets Amid AI Euphoria and Tariff Deals

The return of capital to U.S. assets is being driven in part by renewed investor enthusiasm around artificial intelligence and large-cap tech, which have propelled Wall Street indices to record highs. Despite widespread fears earlier in the year about U.S. macroeconomic vulnerability, the S&P 500 has posted year-to-date gains in line with Europe’s best-performing indices.

A major turning point came with the U.S.-EU trade framework agreement last weekend, which helped alleviate some geopolitical uncertainty and may have catalyzed a rotation back into the U.S. dollar and equities. According to Edmond de Rothschild's Michael Nizard, these shifts reflect a broader realignment in currency markets and investor sentiment, though he remains skeptical that the trend will hold beyond year-end.

Crowded Dollar Short Positions Unwind, Exposing Global Risks

Earlier in July, shorting the dollar was the most crowded trade globally, according to Bank of America’s fund manager survey. As these positions unwind, investors like Pictet Asset Management's Shaniel Ramjee are rapidly rebuilding dollar exposure from “practically zero.” Barclays data confirms a marked slowdown in speculative anti-dollar bets, particularly among trend-following hedge funds (CTAs), which are simultaneously reducing European equity exposure.

This repositioning is triggering what Barclays’ Emmanuel Cau describes as a potential “pain trade,” where the reversal of popular strategies inflicts losses across portfolios concentrated in European and emerging market assets. With the dollar rallying, global equities that had outperformed based on USD weakness are now vulnerable to profit-taking and underperformance.

Temporary Dislocation or Structural Shift?

Despite these shifts, some fund managers maintain a bearish long-term view on the dollar, citing fiscal deterioration and political risk. Amundi’s Monica Defend argues that Trump’s fiscal expansion and pressure on Fed independence will eventually weigh on the greenback. However, she acknowledges that persistent upside surprises in U.S. economic performance could change that view.

Seasonal caution is also setting in. August and September are historically weak months for the S&P 500 in terms of risk-adjusted returns. Nutshell Asset Management’s Mark Ellis plans to reduce risk exposure soon, expecting a potential pullback in the coming weeks.

The unexpected comeback of the U.S. dollar is more than a currency story it’s triggering a global market reset. As short positions unwind and capital returns to U.S. equities, investors are being forced to reassess allocations to Europe, emerging markets, and commodities. While some see this as a temporary rotation, others warn of deeper consequences if the dollar rally persists, including a more volatile and defensive second half of the year.