Pakistan-American relations lie in uncharted territories. Rumblings from both capitals suggest that the two long-time allies are on the verge of a historic rupture – possibly heralding a seismic shift in America’s foreign policy in the Persian Gulf and ushering in a realignment of allegiances in the region.
From the early 1950s until recently, strong US-Pakistani relations were an essential element of American foreign policy in the Persian Gulf. US officials have for decades positioned Pakistan as a first line of defence against America’s enemies – first against Soviet expansionism and then against the forces of Islamist extremism. Since 2001, Pakistan has been the keystone of America’s ‘War on Terror,’ receiving more than $10 billion in American aid between 2001 and 2009 and buying more than $5 billion in U.S. weaponry.
A series of spats between Washington and Islamabad in the past eighteen months have quickly eroded what was once an almost ironclad relationship, however. More importantly, these conflicts underscore the two countries diametrically opposed geostrategic interests.
Washington, on the one hand, is set on propping up a tottering Afghan regime that almost no one envisions surviving without massive amounts of American support; hoping that Karzai’s regime will act as a bulwark against the Taliban and its Islamic foes. Islamabad, on the other hand, is doing what Pakistani governments have done for decades: colluding with Islamic militants in order to exert pressure and destabilize its adversarial neighbors. Islamabad has long seen the Taliban as a useful tool in its endless duel with India and it is simply throwing in its lot with the forces it feels it can best manipulate. Unfortunately however, the Islamic militants are a markedly unruly lot, not given to submitting to outside control.
Pakistani officials distrust the Karzai regime and its close links to Pakistan mortal enemy, India, rightly seeing the Karzai regime as doomed once America begins its inevitable military withdrawal from the region. No matter how chronically corrupt and inept, Islamabad sees what Washington refuses to acknowledge. In the words of former CIA Station Chief in Kabul, Graham Fuller:
[American] military force will not win the day in either Afghanistan or Pakistan. Crises have only grown worse under the US military footprint….The Taliban represent zealous and largely ignorant mountain Islamists. They are also all ethnic Pashtuns. Most Pashtuns see the Taliban, like them or not, as the primary vehicle for restoration of Pashtun power in Afghanistan lost in 2001. Pashtuns are also among the most fiercely nationalist, tribalized and xenophobic peoples of the world, united only against the foreign invader. In the end the Taliban are probably more Pashtun than Islamist. 
American officials are well aware of Pakistan’s Afghan policies. In September of 2011, Defense Secretary Leon Panetta confirmed that the Haqqani network, a terrorist network that earlier attacked the U.S. Embassy in Kabul, is a “veritable arm” of the Pakistani Inter-Services Intelligence (ISI) Directorate.  Pakistan, according to the Council on Foreign Relations, has emerged as a terrorist sanctuary. 
The White House has attempted reign in its erstwhile ally using diplomatic pressure and monetary incentives, to little avail. In September 2009, Congress passed bill P.L. 111-73 authorizing the President to provide $1.5 billion dollars a year in aid to Pakistan from 2010 through 2014. Laws attached to the loan stipulate, however, that American aid can only be released if Islamabad adheres to American counter-insurgency policies in Pakistan. 
More and more, however, Islamabad has proved an unwilling dance partner. After P.L. 111-73 was passed, Islamic army leaders expressed “serious concern regarding clauses [P.L. 111-73] impacting on national security.”  Even more, Washington’s persistent use of unilateral drone attacks in Pakistan, resulting in the deaths of many innocent Pakistani civilians, have whipped up a wave of anti-American furor in Pakistan, and nourished Islamic sentiment in the region.  The assassination of Osama Bin Laden in Abbottabad, Pakistan in late 2011, in flagrant breach of Pakistan’s sovereignty, outraged Pakistani officials and the public equally.
America’s geostrategic clout in the region is declining rapidly, as is its credibility. Even though NATO’s forces in Afghanistan are at their peak, Washington still cannot wrangle in the Taliban. Declared a victory upon departure, US encroachment into Iraq nonetheless showed the limits of empire. The Arab Spring robbed Washington of some of its political stalwarts in the region. Two failed wars and an ailing economy have uncloaked Washington’s fallibility and given America’s rivals in the region room to maneuver.
In the backdrop of America’s waning influence in Pakistan lies China, Pakistan’s South Eastern neighbour. The now second largest world economy relishes the prospect of Washington’s diminished role in the region, and has steadfastly pursued strengthened ties with Islamabad in recent years.
When American marines were reported to have killed Osama Bin Laden, Beijing voiced its outrage at America’s breach of Pakistani sovereignty. Both China and Pakistan oppose American plans to maintain bases in Afghanistan following NATO troop withdrawal in 2014. Beijing also provided, and paid for, 50 JF-17 fighter jets to Pakistan. Mutual dislike of India, which both countries see as a regional rival, bolsters the burgeoning Pakistani-Chinese alliance.
Even more, China is planning on investing up to $3 billion a year into Pakistan by the end of 2012; double the annual assistance from Washington and with no strings attached. In China, Pakistan has a very potent counterweight to the US.
Flush with its newfound political leverage, Pakistan recently told the White House that it is “re-evaluating [its] entire relationship” with Washington.  The White House got a first feel for the shifting power balance when Pakistan retaliated for an American airstrike that killed 26 Pakistani soldiers by closing supply routes into Afghanistan. While few would argue the merits of Washington’s current modus operandi in Pakistan, the end of the American-Pakistan partnership has the potential to throw the entire region into chaos. Most experts argue that the Pakistani state is one good push away from a sudden collapse - the implications of which are significant.
 Graham Fuller (former CIA station chief in Kabul), “Obama’s Policies Making Situation Worse in Afghanistan and Pakistan,” May 10, 2009, http://www.huffingtonpost.com/graham-e-fuller/global-viewpoint-obamas-p_b_201355.html
 Tony Capaccio, “Haqqani Terrorist Group ‘Veritable Arm of Pakistan Intelligence,’ September 22, 2011, http://www.bloomberg.com/news/2011-09-22/haqqani-terrorist-group-veritable-arm-of-pakistan-intelligence.html
 Jayshree Bajoria, “Pakistan’s New Generation of Terrorists,” December 9, 2011, http://www.cfr.org/pakistan/pakistans-new-generation-terrorists/p15422
 Susan B. Epstein, “Pakistan: U.S. Foreign Assistance,” Congressional Research Service, June 7, 2011, http://fpc.state.gov/documents/organization/166839.pdf
 US embassy cables, Reviewing our Afghanistan-Pakistan strategy, The Guardian, 30 November 2010: http://www.guardian.co.uk/world/us-embassy-cables-documents/226531
 Eric Schmitt, “U.S. Prepares for a Curtailed Relationship with Pakistan,” December 25, 2011, http://www.nytimes.com/2011/12/26/world/asia/us-preparing-for-pakistan-to-restrict-support-for-afghan-war.html?pagewanted=all