The Pakistan stock market has a much better idea than our policy formulators on what has really affected the global economy in the form of ‘reciprocal’ tariffs of us.
The nation’s shares market took a severe departure drop on Monday, falling 7.31PC in a moment despite a pause in the trade unleashed by the activation of circuit switches to avoid the sale of panic and extreme volatility, after a strong fall in the assessments of the shares during the morning session.
Although the PSX managed to recover some of the losses later in the day, his bassist response to the rates of President Donald Trump shows that the fear of the recession of the whole world weighs the minds of the investors rather than the comfort offered by the optimism of the Minister of Finance Muhamad Aurengzeb that the punitive rates could become a situation of victories for both countries. “You should never let a good crisis waste. We are seeing it as much as a challenge as an opportunity,” said the minister on Saturday.
But, one thing is to be optimistic and another being demanding. The minister, and many entrepreneurs, hope to offer the White House something in the form of reduced or zero taxes in the imports of the USA. In addition to increasing purchases of US exporters to obtain tariff concessions from the Trump administration. They also believe that the country’s exporters would win instead of losing for American action since their competitors such as Vietnam, Bangladesh, Cambodia, etc. They have been slapped with more steep import taxes.
It is not clear how our policy and business formulators plan to win a greater market share in the United States, since we do not produce high quality garments and textiles, as well as other products that our rivals sell to the United States. Nor is it clear how our decision makers plan to meet President Trump’s demand from all foreign countries to reduce their commercial surpluses with the United States. Despite the agitation of the global market, the United States leader has made it clear that it would not reach an agreement with other countries unless commercial deficits were resolved.
It is difficult to say how the situation will develop in the near future. But it is more or less clear that a complete commercial war is over us, since the era of the multilateral commercial order based on rules is almost over. With that we are entering an arbitrary and protectionist phase where it could be correct, which raises an important risk for the weakest economies like ours.
The stability and clarity that international commercial relations had under the framework of the WTO would no longer be available. Even if we can obtain concessions from the United States, it will not protect us from the possible negative impacts of the changes generated by the rejection of trade based on rules for the largest economy in the world. Optimism is welcome, but we must also be clear and prepared to prepare for possible clashes to come.
Posted in Dawn, April 8, 2025
