"Prepare to designate Pakistan as a state sponsor of terrorism unless it changes course and abandons support for terrorists". The last Coalition Support Funds were paid to Pakistan in March previous year, provided under defence spending legislation for 2016.
Mr. Trump has signaled his frustration with Pakistan in the fight against terror since he lashed out at the country during an August speech outlining his strategy in Afghanistan.
He said despite longstanding United States allegations against Pakistan allowing militants to operate from its territory, the two countries have a lot to build on, including Islamabad's efforts to stay on democratic course and continue its fight against terrorists against all odds.
The White House said last week the United States will not be paying Pakistan $255 million in foreign military assistance from a package set aside for the one-time ally for 2016 -- it had been held back earlier in 2017 and then cleared -- before it was finally withheld.
Pakistan civilian and military chiefs rejected what they termed "incomprehensible" US comments and summoned US Ambassador David Hale to explain Trump's tweet. She told reporters that until Pakistan takes "decisive action" against those groups, security assistance was suspended.
Also Thursday, the State Department accused Pakistan of severe violations of religious freedom. The step does not carry any serious consequences.
In his first message on the first day of the New Year, Trump unleashed a volley of allegations against Pakistan, saying the South Asian country has not done enough in return for USA aid.
"What I fear is that these US pressure tactics could backfire in a big way, cause Pakistan to tighten, not ease, its embrace of Afghanistan-focused militants, and lead to even more violence in Afghanistan", he said. The situation, nevertheless, seems fluid and officials say Pakistan is ready for any misadventure.
The two countries, he added, maintain an "all-weather strategic partnership" and China intends to further deepen its cooperation with Pakistan in all fields. "Past U.S. withholding of assistance has been matched by declines in cooperation and U.S. -Pakistan relations".
"There are considerable risks for the US because Pakistan could retaliate in ways that would be very problematic for USA regional interests", he said, such as curtailing intelligence co-operation and USA supply lines into Afghanistan. A few days ago, CENTCOM commander General Voetel said that the USA was attempting quiet discussions rather than public messaging to Pakistan. "If the US escalates in kinetic terms with drone strikes outside the established zones, Pakistan can escalate in kind and attempt to shoot down some drones", said Mr. Lalwani. Pakistan has plenty of tools to respond to further US coercive measures including closing the G-LOCS and A-LOCS [ground and air lines of communications], ratcheting up the temperature on the Afghan border, and reducing intelligence cooperation.
In a CNN appearance, Dr Akbar Ahmed, Pakistan's former ambassador to the United Kingdom, reminded policymakers why it is important for Washington that Islamabad remains on its side.
"No matter what, the relationship is in a bad spot right now".