Silver Lining in Dark Clouds

Global trade has witnessed renewed turbulence following US President Donald Trump’s return to the White House. His protectionist tariff policy—an attempt to rewrite the global trade system—has unsettled many nations. As a result, analysts now describe US trade policy under Trump as increasingly unpredictable. In April, President Trump announced additional import tariffs targeting most countries, only to defer their implementation for 90 days. The situation, especially regarding trade with China, has grown increasingly complex. On Thursday, the White House issued a presidential executive order titled “Further Modifying the Reciprocal Tariff Rates”, imposing steep tariffs on several countries. Notably, Nepal was excluded from this list—a development that experts say presents a window of opportunity. According to trade analysts, the 10% tariff imposed on Nepal back in April remains unchanged. Compared to the increased tariff rates imposed on neighbouring countries by the Trump administration, Nepal’s rate is relatively modest. This gives Nepal a potential competitive edge. For example, India faces a 25% tariff, Bangladesh and Sri Lanka 20%, Pakistan 19%, and Afghanistan 15%. These higher tariffs will raise the price of goods from these countries, making Nepal’s products comparatively more attractive. However, without a concrete strategy to utilize this advantage and without boosting exports, such preferential treatment may hold little value, given the fact that Nepal has historically failed to capitalize even on the existing trade preferences granted by the US.