ISLAMABAD: As Pakistan struggles with a widening trade deficit, rising unemployment, and the exit of several multinational firms, economic experts are calling on the government to adopt a more assertive protectionist strategy one reminiscent of former U.S. President Donald Trump’s “America First” approach to shield domestic manufacturing.
Analysts Shahbaz Rana and Kamran Yousaf, speaking on Express News’ show The Review, pointed to Trump’s policies as a model worth studying. Trump’s strategy relied heavily on import tariffs and stringent measures to discourage American companies from outsourcing production abroad. “We want to build, create and grow more products in our country using American labour, American goods and American grit,” Trump had said during a July 17 speech at the White House, marking the launch of Made in America week.
The analysts argued that Trump’s approach went beyond mere promotion of domestic industry. Through tariffs and the threat of punitive action, he effectively brought manufacturing back onshore. They believe Pakistan must adopt a similarly robust strategy if it wants to avoid economic collapse. “Protecting Pakistan’s local industry isn’t optional it’s a necessity,” they said.
Official data shows Pakistan’s trade deficit surged by 33 percent in just three months, reaching $9.4 billion. Meanwhile, major companies including Procter & Gamble, Telenor, Microsoft, and Gillette have either scaled back operations or exited the market altogether. Experts attribute this trend to sudden tariff reductions, rising operational costs, and a lack of safeguards against dumped imports, particularly from China. A controversial overnight cut in import duties in June left local manufacturers exposed to heavily subsidized and underpriced foreign goods.
Industries such as steel, paper and board, electronics, pharmaceuticals, construction materials, textiles, and food packaging have been hit the hardest. According to industry bodies, Chinese exporters frequently modify product specifications to bypass anti-dumping measures, flooding Pakistan’s markets with near-identical goods at below-market prices.
Legal hurdles have also hampered anti-dumping enforcement. While the National Tariff Commission (NTC) has imposed duties in several cases, manufacturers complain that prolonged litigation and judicial interference weaken enforcement. “Once duties are imposed, cases drag on for years in the courts,” the analysts explained. “Even after final rulings, implementation remains uncertain. Unfair dumping acts like a death sentence for Pakistani industries.”
A recent IMF report highlighted similar challenges, noting that commercial disputes clog courts, slow adjudication, and undermine both investor confidence and policy enforcement.
Local businesses also face structural disadvantages:
- High Tax Burden: Corporate tax stands at 29 percent, with an additional 10 percent super tax and dividend taxes, pushing the effective rate above 50 percent.
- Expensive Utilities: Electricity and input costs remain significantly higher than in regional competitors.
- Trade Agreements: The 2005 Free Trade Agreement (FTA) with China, and its expanded Phase II signed in 2019, opened local markets to foreign goods without adequate safeguards for domestic industries.
As domestic firms shut down, unemployment rises, while World Bank reports link increasing poverty to an economic model that prioritizes trade over industrial development. Analysts warn that once local manufacturers exit, importers who initially dumped cheap goods often raise prices, creating monopolies and fueling inflation. “This is a classic domino effect,” they said. “Deindustrialization leads to job losses, which eventually locks the country into long-term import dependency.”
Industry leaders are urging Prime Minister Shehbaz Sharif’s government to act swiftly. Proposed measures include rebuilding tariff protections for vulnerable sectors, empowering the NTC for faster enforcement, reforming commercial courts to prevent endless litigation, revisiting trade deals that expose local industries to unfair competition, and increasing transparency through the IMF’s Rule of Law report.
“There’s a clear choice,” the analysts emphasized. “Continue fueling foreign industries while killing jobs at home or take bold steps to build a manufacturing economy and protect Pakistan’s economic sovereignty.” They concluded that for Pakistan to survive economically, it must adopt Trump’s approach not in rhetoric, but through decisive, unapologetic action.
