Misplaced elation?

ALAN Greenspan, the then Federal Reserve chair, warned during the dot-com bubble of the 1990s that the stock market might be overvalued, and described the public frenzy as “irrational exuberance”.

While ties between countries are not like the stock market, they can be overvalued, invoking “irrational exuberance” among the leadership, media and the public. Pakistan-US ties currently exude such sentiment. Since President Donald Trump’s meetings with Field Marshal Asim Munir last summer, there has been a triumphalist feeling, especially in the media, that Pakistan had so charmed the White House that the era of India’s centrality to America’s South Asia policy had effectively ended.

The recent US-India framework trade deal may have dampened optimism on this front but enthusiasm about Pakistan-US relations in their own right will likely linger. It’s important to temper this feeling by sifting hype from reality for the benefit of Pakistan’s leadership lest they make faulty policy choices based on a magnified view of the relationship.

To begin with, it’s best not to get carried away with Trump’s bonhomie, invitations to various summits, and compliments to the prime minister and field marshal. Trump’s compliments are always self-serving. They do not reflect how he is going to treat an individual but how he expects the latter to treat him. He always expects more than reciprocity and may demand at some point policy shifts that favour him or America.

It’s best not to get carried away with Trump’s bonhomie.

Having said that, one must acknowledge that bilateral ties have made progress under Trump — something that the Pakistan leadership has reason to be happy about. Positive developments on both sides include: a relatively low tariff of 19 per cent, Pakistan’s purchases of West Texas Intermediate crude, expression of US interest in oil exploration in Pakistan and Washington’s designation of the BLA/ Majeed Brigade as a terrorist organisation. One can also mention the sale of $686 million worth of maintenance and upgrade package for F-16s, and ongoing military and intel cooperation.

The Trump family-backed World Libe­r­­ty Financial has recently signed a deal with Pakistan for cooperation in cryptocurrency. US Strategic Metals had earlier signed a $500m MoU with Pakistan to develop its critical minerals sector. The US Export-Import Bank will reportedly invest $1.25 billion in the Reko Diq mine. Assistant Secretary of State Paul Kapur in a recent Congressional testimony called Pa­­kistan an important US partner in tra­de, economic and security cooperation.

However, the future trajectory of relations is unclear. There is nothing permanent about Trump and his policies. Pakistan’s rare earth minerals and possible oil reserves lie at the centre of his attraction. But Pakistan’s viability as an economic partner is untested because of the country’s indebtedness and continued reliance on the IMF. Also, the precarious security situation in Balochistan and KP — sites of the critical minerals — could impact this sector’s development.

Yet the rhetoric is exaggerated, and not just in Pakistan. On Trump’s part, the relationship is beating to the rhythm of many of his ongoing manoeuvres. For instance, there are the financial interests of the Trump family and broader US economic interests. The relationship is also being used as a leverage against India and China. The hype boosts the leverage.

The leverage has worked with India. As for China, preventing the domination of the Indo-Pacific by China is a critical US goal. To this end, Trump may leverage US ties with Pakistan by ma­­nipulating them to China’s satisfact­ion or discomfiture. But this might be done as part of ‘balancing’ and ‘deterring’, not containment of China, as indicated by Ame­rica’s National Secu­ri­­ty Strategy and Natio­nal Defence Strategy. If Pakistan plays its cards right it could balance the necessary relationship with Washington with the indispensable one with China.

Islamabad should expand, maximise, and prioritise its external alignments. Already we’ve seen how Pakistan’s rising military capability, changes in the Middle East and the renewal of Pakistan-US ties have together opened up opportunities for strategic diversification and boosting Pakistan’s regional influence. It has also made Pakistan strategically relevant to the US, Saudi Arabia and Iran simultaneously.

Bottom line: with Trump the future of ties will always be uncertain. The worst thing Pakistan can do is to be lured by the emotion of the moment and make strategic commitments, like adjusting ties with China or policies vis-à-vis Iran or recognise Israel, and then be left out in the cold when Trump is gone. A Pakistan that identifies itself too much with Trump’s policies may suffer a backlash.

The writer is a former ambassador and adjunct professor at Georgetown University.

Published in Dawn, February 22nd, 2026

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