Donald Trump is playing a dangerous game with Pakistan. Here's why

In Lahore and Karachi, American flags were burned in front of TV cameras after President Trump’s decision on Jan. 4 to withhold $2 billion of security aid from Pakistan to punish it for allegedly harboring terrorists. The country’s government issued angry statements claiming no insurgents were being given sanctuary and that the US wasn’t fully appreciative of the thousands of Pakistani soldiers killed fighting militants.

The rancor isn’t new. The US relationship with Pakistan, which deepened during the Cold War, is both strategic and troubled. The complications increased with the Soviet invasion of Afghanistan in 1979, when the US funneled arms and cash through Pakistan’s main spy agency to the Afghan guerrilla resistance—the mujahedeen. Among the foreigners who flocked to the chaos in Afghanistan was Osama bin Laden. Since Sept. 11, the US has given Pakistan billions of dollars in military aid and continued to rely on it as a main supply route into Afghanistan. Yet despite its assistance capturing and killing many senior al-Qaeda leaders, Pakistan has been routinely accused of continuing to support militants carrying out attacks on Afghanistan and India. Bin Laden hid in Pakistan for years before being killed in a Navy Seal raid in 2011.

Under President Barack Obama, US aid to Pakistan slowly dwindled, and portions occasionally were frozen by Congress amid accusations that Islamabad wasn’t doing enough to root out the Taliban-affiliated Haqqani network. Things have gotten worse under Trump. In August he made a point of calling out Pakistan for its apparent duplicity while outlining a plan to end the war in Afghanistan—troop increases and prodding Pakistan’s nemesis India to take a larger role. Trump foreshadowed his decision to cut off funding in a New Year’s Day tweet in which he said the U.S. has “foolishly” given more than $33 billion and received only “lies and deceit” in return. “What was coming was in the cards,” says Mahmud Ali Durrani, a retired Pakistan army major general and former ambassador to the US. “This is one of the lowest points in the relationship between the two countries.”

Trump risks alienating a key US. ally in the war on terror, one that has nuclear weapons and finds itself boxed in by India to its east and Afghanistan to its west. Already, Trump has managed to unite Pakistan’s ruthlessly adversarial politicians seven months before national elections, shifting the political conversation from one of accusations of corruption to unified defiance against the US.

Trump may also end up driving Pakistan closer to extremists in Afghanistan including the Taliban and the Haqqani network, which may find ways to stymie his renewed efforts in that country. One drastic measure Pakistan could take would be closing overland access to landlocked Afghanistan, as it did for eight months in 2011 and 2012 after NATO forces killed Pakistani troops. “If Pakistan decides to retaliate by shutting down supply routes for NATO forces, then there could be big problems,” says Michael Kugelman, a senior associate for South Asia at the Woodrow Wilson International Center for Scholars in Washington.

Those routes are lucrative for Pakistan, which profited from transit and port fees, so it may be reluctant to block U.S. access. The country is also facing economic stress and speculation that it may go to the International Monetary Fund for its 13th bailout since 1988. Plus, it lost revenue when it last closed NATO access. “The Pakistani route is less a necessity and more a lower-cost convenience for the US,” says Husain Haqqani, Pakistan’s ambassador to the US from 2008 to 2011. “The US must decide if the higher cost would be a price worth paying for a freer hand in conducting the war in Afghanistan. Pakistan must decide if it wants to forgo the economic benefits of transshipment.”

If it does, the country may lean more heavily on China as a source of investment. China is financing more than $50 billion in infrastructure projects in Pakistan as part of its Belt and Road trade initiative. It overtook the U.S. as the largest investor in Pakistan four years ago and has since doubled its direct investment there to $1.2 billion a year. With more Chinese funding, Pakistan could push back further against American demands.

But, as Haqqani points out, Chinese loans are no substitute for American cash and high-tech weaponry. “Pakistan is perennially short of foreign exchange,” he says. “Moreover, China charges higher interest on loans.” Pakistan for its part may also want to avoid further sanctions, including on travel—more of its elite are schooled and work in America than in China. The U.S. also remains Pakistan’s largest export market. Nonetheless, “the US has cut aid to Pakistan before, and that didn’t cause Pakistan to change its behavior,” says Kugelman at the Wilson Center. “How these moves play out will go a long way toward determining the trajectory of this very troubled relationship.”

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U.S. officials have left open the prospect of releasing the aid should Pakistan prove cooperative. For its part, Pakistan says it’s done more than any other nation in the battle against terror. Security vastly improved in the years since the army decimated groups launching attacks in Pakistan after a school massacre in 2014. Residents in the financial hub of Karachi until a few years ago lived in fear of kidnappings and street warfare. Now restaurants are crowded, business is thriving, and bombings are unheard of.

The lack of U.S. money could hurt Pakistan’s ability to modernize its aging military equipment, because Islamabad is reliant on U.S. technology, says Abdul Basit, a research fellow at Singapore’s S Rajaratnam School of International Studies. If relations don’t improve, the US may shift drone attacks from Pakistan’s tribal areas deeper into the country, to areas such as the restive southwestern province of Balochistan, Basit adds. In the end, though, the decision on aid is unlikely to have long-term impact on regional dynamics—the U.S. will be unable to impose a solution in Afghanistan, even if it has Pakistan’s full support, he says. “There will definitely be anger and frustration in Islamabad,” Basit says. “But is Islamabad going to adjust its behavior? They might make some technical moves. But in terms of a strategic shift? I don’t think so.”