Global Trade War And Pakistan
Global Trade War And Pakistan: The world has occupied with an exchange war with significant economies forcing taxes and obligations, a move which can have extensive ramifications for worldwide trade and business.
With nations like the US, China, the EU and Canada all taking retaliatory measures, which may prompt tax disturbance, the effect on Pakistan is probably going to be favorable because of constrained combination with the worldwide inventory network. Be that as it may, things may change, if the circumstance rises.
Subsequent to fears of the exchange war, a few specialists envision just a restricted effect on the worldwide economy.
Smoot-Hawley Tariff Act of 1930
The world is aware of the consequences of Smoot-Hawley Tariff Act of 1930, adding to the considerable strain in international economic climate.
The punitive tariffs of that time, however, gave a much greater weight to the overall import volume as compared to current tariffs, which takes a much lesser proportion of the trading volume.
Exports of steel and aluminium from the EU to the US make up just 0.3% of worldwide goods and represent a tiny 0.05% of the bloc’s GDP. Thus, the tariffs on just $60 billion out of trillions are unlikely to disrupt the global trade.
Trade War On Global Economy And Pakistan
Speaking about the impact of the trade war on global economy, former WTO ambassador Dr Manzoor Ahmed told that in the 1930s, the US imposed tariffs on more than 20,000 products and for over 3,000 products, tariff rates were increased by 60%, which meant quadrupling previous tariff rates.
However, the current tariffs are limited in scope and they just apply to two products worth about $60 billion of imports, which means covering about 2% of US imports of about $2,400 billion, he added.
Although the global climate has been strained by the ongoing talks on the trade war, Pakistan remains far from the melee.
It is not likely to be disrupted by the split between the western alliance as we export very little of the products that are targets of the tariffs. We have a very small volume of trade with the US with no trade in steel and aluminium.
Speaking on the impact on Pakistan, Ahmed said, “Pakistan will hardly feel any impact in the short term as the tariffs are mostly on products not of our interest.”
He said if the tariff war escalates to products such as textiles and clothing, “we could gain some market share at the expense of other countries.”
Pakistan is not a major international economic power and thus has a very small amount of trade with the US, largely favoring Pakistan in this scenario.
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