- Country must remain vigilant, agile, and proactive to survive in an increasingly fragmented world
The world is undergoing a profound and unsettling transformation. We are entering an era that is increasingly arbitrary, protectionist, and dangerous. Global institutions that once served as pillars of international cooperation are weakening, and long-established norms are rapidly eroding. In this volatile environment, it is imperative that Pakistani policymakers remain fully cognizant of the emerging threats and prepare the nation to navigate the challenges ahead.
The shift is not theoretical — it is already underway. US President Donald Trump’s decision to impose tariffs on a broad range of countries, including Pakistan, marked a turning point. Although his administration has since concluded, the effects of his economic policies continue to reverberate. These tariffs were not merely economic tools; these signaled a seismic change in the global order. The era of rules-based globalisation, characterized by relatively free trade and multilateralism, appears to be coming to an end.
For decades, the United States played a central role in upholding the framework of free trade. It was the anchor of the World Trade Organisation (WTO), advocating for a global trading system grounded in transparency, predictability, and mutual benefit. This system, while imperfect, contributed to global economic stability and enabled developing countries, including Pakistan, to participate in the international economy under a common set of rules.
However, the move toward “reciprocal tariffs” and unilateral trade deals on a country-by-country basis represents a stark rejection of this multilateral approach. Even if close allies are not exempt, then every country is vulnerable.
This trend is especially alarming for developing economies like Pakistan. As larger nations begin to act based solely on narrow self-interest, using economic pressure or even force to assert their will, smaller countries may find themselves increasingly marginalized.
In this emerging world order, where power dynamics override rules, Pakistan risks being squeezed out of key markets and left behind in global economic developments.
A coordinated international response to such protectionist policies is likely. While Pakistan may choose not to retaliate with tariffs of its own, other nations may not show the same restraint.
The possibility of a full-blown global trade war is no longer a remote scenario, it is a growing concern. Trade wars historically have far-reaching consequences. The world experienced something similar in the 1930s, and the resulting economic chaos helped pave the way to World War II.
If such instability returns, the global economy will suffer. International trade and investment will decline, and the growth trajectory of many countries will be disrupted.
Unfortunately, Pakistan’s economic vulnerabilities make it especially susceptible. With low foreign exchange reserves, structural weaknesses, and heavy reliance on multilateral institutions such as the International Monetary Fund (IMF) — where the United States holds significant influence — Pakistan lacks the financial resilience to cushion against global shocks.
Unlike wealthier nations that can offer stimulus packages and social safety nets in times of crisis, Pakistan does not currently possess the capacity to adequately support households or businesses should economic conditions deteriorate further. This makes it even more critical for policymakers to engage proactively with Washington and other key global players to minimize the negative fallout of any emerging trade disputes.
Beyond economic implications, the erosion of international norms also poses geopolitical risks. The use of economic coercion, disregard for established treaties, and weakening of diplomatic institutions all contribute to a more unstable and unpredictable world. No one can predict with certainty how the situation will evolve over the coming months or years, but we must recognize that the risks are real, and they are escalating.
Pakistan must not view these developments with passive resignation. The time for complacency is over. In the face of such uncertainty, we need to remain alert, agile, and prepared. The country must focus on building resilience by strengthening internal governance, diversifying its economy, and investing in strategic partnerships with like-minded nations who still believe in fair trade and collective progress.
We must also work toward enhancing regional cooperation. Initiatives such as the China-Pakistan Economic Corridor (CPEC) offer avenues to foster connectivity and economic growth. However, reliance on a single partner is not a viable long-term strategy. Pakistan should pursue a multi-vector foreign policy that broadens its network of allies and economic partners.
Domestically, unity and national resolve will be crucial. Political instability, lack of consensus, and policy inconsistency only weaken Pakistan’s ability to respond to external shocks. The leadership, across party lines, must rise to the occasion and act in the national interest.
The world we once knew — a relatively stable, rules-based international system — is unlikely to return anytime soon. Small and medium-sized states can no longer rely on global norms for protection or prosperity. In this new era, only those who are proactive, united, and strategically aligned will thrive.
Let us not be lulled into a false sense of security. The road ahead is fraught with challenges. However, if Pakistan remains vigilant, acts decisively, and stays united, it can weather the storm and carve out a stable and prosperous future in an increasingly fragmented world.