Trump’s tariffs have jolted the world. Their impact on global value chains could be similar to what COVID-19 had. As of now, the reciprocal duties (barring China) have been halted for 90 days. However, a baseline 10 percent tariff is applicable across the board, with 25 percent on certain products.

Most US trading partners have reached out (or are planning to reach out) to the US to negotiate, and many are ready to eliminate the duties on US products to reduce the reciprocal tariffs imposed on them. Pakistan is no exception. The question is what Pakistan can bring to the table, what the opportunities and challenges are, and what its strategy should be.

Pakistan’s government and exporters are excited and seeking opportunities in this global disruption. However, critics fear that Pakistan is at the bottom of the list in terms of trade with the US, and a balance-of-payment-constrained poor country does not have much to offer. The US may perhaps tell us about certain demands, and we need to comply — as it did after 9/11, when they said: either you are with us or against us.

Critics’ arguments may carry weight. However, sitting idly should not be an option. And the government is in the process of making a strategy. There are challenges and opportunities for Pakistan. The policy response should focus on the opportunities while being cognizant of the risk of doing nothing, which may increase our current account deficit, leading to another........

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