In an attempt to slash foreign aid, the Trump administration in its maiden budget has proposed converting a portion of US foreign military grants into loans. A range of cuts to many other foreign programmes has also been introduced. For Pakistan, the new administration has proposed $344 million in financial assistance, including $100 million in foreign military finances, which is a reduction of $190 million as compared to the year 2016. The United States is re-shaping the way it grants military assistance to foreign nations. Traditionally, the US appropriated funds as loans or grants to enable partner countries to buy American military equipment. The Trump administration wants to convert the majority of grants to loans so that countries would repay at a later date. For Pakistan, it means more tough choices. In 2016, Islamabad refused to contribute matching national funds for the purchase of eight F-16s owing to its financial difficulties. This pattern is likely to repeat itself. Pakistan would have to be highly selective in buying US military equipment given the state of its own national resources. A large-scale military expenditure would put a strain on the limited financial resources during an election year, when the sitting government’s priority is development spending. The latest measures by the Trump administration aimed at cutting down the foreign aid budget will add another irritant to the bilateral relationship which is currently adrift and in the process of renegotiation. Pakistan would definitely make a case for enhanced economic and military assistance citing the losses incurred due to the ongoing war against terror. Pakistan’s case is strong. During the last decade, regional conflict and terrorism have cost the country up to $118 billions as estimated by the federal government. Even though the internal security situation has improved, the goal of achieving durable political and economic stability remains distant. Pakistan relies on foreign assistance to achieve economic stability. The China-Pakistan Economic Corridor is likely to inject more than 50 billion dollars in the coming years. The civil and military leadership could not have asked for more. Pakistan has to contend with a changed US administration, which views foreign relationships as transactional; and in South Asia regards India as its reliable, long-term partner. However, contrary to the populist slogans, the relationship with the United States is an important one. The US is a large trading partner, a valuable source of remittances and there is ample scope to redefine the relationship based on trade, technology transfer instead of one predicated on aid. This is why the foreign policy establishment needs to think beyond the US-India alliance and find creative ways to engage with the Trump administration. If the Riyadh Summit is an indicator, Washington’s view of Pakistan is sceptical if not outright jaded. It is time to invest in serious public diplomacy and redrawing the parameters of bilateral engagement lest this cooling turns into a divorce of sorts. *