Pakistan is located at the crossroads of South Asia, the Middle East, and Central Asia, which has always made it important in regional and global affairs. Its decisions on the economy and security affect not only itself but also its neighbors. Today, Pakistan is growing trade with the United States while also strengthening its partnership with China through CPEC 2.0. This shows that Pakistan is a country that cannot be ignored. By using its location, partnerships, and changing alliances, Pakistan is carefully balancing the competition between major powers.
For much of its modern history, Pakistan has had a close relationship with the United States, especially in security matters. During the Soviet invasion of Afghanistan in the 1980s and later in the global war on terror, Pakistan played a frontline role. This came at a high cost: more than 50,000 civilians and thousands of security personnel lost their lives, and the economy suffered losses of over $120 billion. U.S. aid of about $26 billion between 2002 and 2013 helped, but tensions remained. Events like the 2011 Abbottabad raid increased mistrust, yet both countries continued working together because of shared security interests. Pakistan’s ties with China, however, have been steadier. From a political and defense friendship, China has become Pakistan’s largest arms supplier and a key partner in CPEC, investing in energy, transport, and infrastructure.
Against this backdrop of history, Pakistan’s current diplomacy reveals both continuity and adaptation. In July 2025, it signed a trade and energy deal with the U.S. to lower tariffs on textiles, IT, and farm products, keeping the U.S. as an important market and investor. At the same time, Pakistan launched CPEC 2.0 with China, with new agreements worth $8.5 billion in IT, agriculture, renewable energy, and infrastructure. Both countries stressed security for Chinese workers and projects. By trading more with the U.S. while keeping strong ties with China, Pakistan aims to get benefits from both sides.
Taken together, these recent developments show that Pakistan is following a careful strategy of balancing its ties between major powers. With growing U.S.-China competition, Pakistan’s location in South Asia makes this careful balancing less a choice and more a necessity. This strategy shapes not only Pakistan’s economy and security but also the broader dynamics of great-power competition in the Indo-Pacific.
This dual engagement also positions Pakistan as an important connector in a world increasingly divided between major powers. At the same time, the recent frictions between India and the United States—over tariffs, trade imbalances, and policy disagreements—create limited space for Pakistan to quietly advance its own trade and diplomatic agenda. While Washington will not risk alienating India’s huge consumer market, Islamabad can still use this moment to fill gaps with strategies that expand exports, deepen cooperation, and strengthen its reliability as a partner.
Pakistan also faces changing dynamics in its neighborhood. Its influence in Afghanistan has decreased as the Taliban acts more independently and builds connections with Iran, China, Russia, and Central Asian countries. Even so, Pakistan remains important for Afghanistan’s trade, transit routes, and refugee management, giving it some leverage, though not full control. Beyond Afghanistan, Pakistan plays a wider role in the region: it provides Central Asia with access to the sea, maintains close economic and security ties with the Gulf, and develops partnerships with Turkey and Southeast Asia.
In September 2025, Pakistan signed an important Strategic Defense Agreement with Saudi Arabia. The deal says an attack on one country is an attack on both, making Pakistan a key security partner. Pakistan also said its nuclear capabilities could help keep the region safe. This move underscores Pakistan’s efforts to strengthen its influence in the Middle East.
Currently, Pakistan is working to carefully balance its ties with the U.S., China, the Gulf, and its neighboring countries. This helps the country protect its interests, attract investment, and grow trade. Progress has been made, but challenges remain—especially rising unrest in Balochistan and Khyber Pakhtunkhwa. As terrorism and violent incidents start to rise again, Pakistan will need a clear but careful approach, similar to its diplomatic strategies abroad, to maintain peace and ensure the security of both its personnel and ordinary citizens.
By acting as a bridge between different powers, it can support regional stability, but keeping this balance will require steady planning and thoughtful diplomacy.
References:
Reuters: Pakistan says it wins US tariff deal; Trump cites oil reserves pact
CPEC Info: Pakistan, China sign MoUs to boost B2B collaboration
Reuters: Saudi Arabia, nuclear-armed Pakistan sign mutual defence pact
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