Sino-US Trade War: Foreseeable Impact on Pakistan



Two major players in the world economic order – the US and China – are entangled in a foreseeably long and highly competitive trade war, one that could have serious implications for the global economy. It would rather act as a brake on the global growth at a time when economies in the developed world need to grow faster to pay down debts accumulated the since the financial crisis. Overall, there is an overwhelming evidence that trade has augmented in those developing countries where supportive policies have been in place. Over time, the countries have learned to balance trade policies with higher investment in infrastructure and education. With the global trading system under assault now, the question for developing countries is how to respond. The enhanced threat from a looming trade war scenario, consequently, is greater than the possible gain from the liberalisation of trade. These mitigating circumstances present a bleak picture not only for the two countries at the forefront of this crisis but for the entire international economy also, particularly for the developing countries like Pakistan. Thus, in the global economic discourse, the longstanding argument between trade protectionism and liberalisation has come to the fore once again.

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