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Resident Trump’s mind -making prices may have caused economic catastrophe all over the world. A recession has begun and is likely to deepen, unless some of its policies change permanently. The feed is a binding, which is trapped in the possibility of both growth and inflation.
The US president has behaved fast like a crowd or an absolute king. He appears in a hurry to make money, which believes that his power is baseless. It seems that it makes fun of using painful sources for a surgery: Majesty is described as a rehabilitation of factory jobs in the United States.
The recent announcement of President Donald Trump’s recent announcement includes a global 10 percent duty on all imports in the United States, with a significant rate of specific countries. China now faces more than 50 %, Vietnam 46 %, Bangladesh 37 % and India more than 26 %. Pakistani exporters had to bear 29 % tariff on exports to the United States.
The United States is an important market for both Pakistani and Indian textile industries. Historically, Pakistan has paid 12 % to 22 % tax on its textile exports. The implementation of new taxes will potentially promote the challenges facing Pakistan’s textile sector, which has already reduced exports.
India’s textile industry, while 26 % are also affected by tariffs, can be slightly improved due to its diverse export portfolio and a large economy. However, rising prices will still create significant challenges for Indian exporters.
Overall, it is expected that high prices will have a negative impact on textile exports of both Pakistan and India, which could potentially reduce export volume and financial tension in their textile industries.
When a large economy like the United States imposes taxes under a protectionist policy (as Trump did during his previous presidency), small countries like Pakistan have to carefully consider their reaction. Let’s take a look at some important factors:
Small countries usually do not have the economic power to take retaliation with equal power. However, they can always be carefully strategies. For example, Pakistan can reduce its dependence on the United States by strengthening trade relations with China, ASEAN, EU, the Middle East and Africa. It should participate in regional trade agreements (eg, RCEP, ECO) that can help him access alternative markets.
Instead of exporting raw or semi -finished goods, Pakistan’s purpose should export value -added products (such as cotton yarn instead of costumes, processed food instead of rice). This will help relieve tariff losses with high unit prices. Pakistan should also use its GSP+ status with the European Union or the FTA should interact with its other business partners. It is clear that US high prices will reduce the volume of textile exports to the United States. To compensate for the loss, exporters and the government will have to lobby for trade incentives from countries interested in countering the US influence (such as China or Russia).
Small countries usually do not have the economic power to take retaliation with equal power, but they can devise intelligence strategies. For example, Pakistan can reduce its dependence on the United States by strengthening trade relations with China, ASEAN, EU, the Middle East and Africa.
Unfortunately, higher prices on Pakistani exports to the United States have been announced at a time when our textile sector is already in poor condition. Our competition was already eliminated from high energy and logistics costs. The Government of Pakistan has taken some steps to reduce the burden of high electricity prices on industries, but our supply is the most defective in the region. The government will have to fund unnecessary spending so that exporters who hurt US prices can be offered incentives. Exporters have to increase the quality of the product to meet the needs of alternative markets.
Pakistan has been weak in exploiting diplomatic channels for trade. But Trump’s recent initiatives have called for serious efforts to work with other affected countries in the WTO to highlight the negative impact of revenue on developing economies, or a coalition in the global forums has been formed.
For most parts, these are US consumers who will pay these rates. Trump’s trade war studies show that US buyers have pushed forward the tax bill through higher prices. So when the United States tries to protect its manufacturers, their families will pay more for their clothes. But we need to be ready. Our textile industry faces challenges like power shortages and obsolete machinery. We have to invest in modernization to handle more orders and stay competitive. The question is: Can Pakistan turn a new tariff situation into a win?
Trump’s prices will damage exports of all countries. However, trade outside the United States will be less affected. This will especially be true about the trade in the intra -Asian and South South. The reason for this is that consumer markets are growing in China, India, ASEAN and Africa. With US prices pushing global supply chains towards “De Americans”, many firms are setting up manufacturing bases in Vietnam, Bangladesh, India and elsewhere.
Digital trade, services export and regional production centers are becoming more important, which reduces dependence on the United States. However, if US revenue gives rise to the global trade war, the effects of other orders such as global GDP growth, reduce investment flow and change in investors’ confidence.
Indians are doing cold work. They have many reasons for many reasons. One of them is that they depend on the US market relatively low. Exports are 18-20 % of India’s GDP and is part of it.
India’s development is mostly under the costs of domestic use, services and infrastructure. India exports more services (IT, pharma, consultation) to the United States and is less likely to target them by prices. Also, the US tariff on Indian textile is the lowest in Asia. This gives Indian exporters confidence that they can end with high textile exports despite a low increase in the United States.
Moreover, despite some differences, India has been seen by the United States as a strategic partner in Asia. This makes aggressive revenue less likely and short -term. If needed, India can change its exports or encourage the local industry. It has a considerable internal market to absorb short -term export shocks.
Pakistan must be fruitful: it should diversify its markets, climb the value chain and take advantage of its geographical economic position. Last year, he exported $ 1 5.2 billion worth of good while importing 1 2.1 billion, resulting in commercial surplus 1 3.1 billion. High tariffs can result in lower exports (about $ 1 billion). The country can harm its exports by diversifying.
Pakistan is still in a better position than some other NS mail countries, such as Laos, Lesotho, Mauritius and Myanmar. Global trade will continue to be ahead of the United States, but many countries will need to adapt to new dynamics.
The author is a senior economic reporter.
