SOUTH ASIAN ECONOMISTS EXPRESS CONCERNS OVER US TARIFFS

A set of economists from South Asia have got together during turbulent trade times for countries in this region and had a discussion. These economists convened online to discuss the impact of the new US tariffs on their countries. Based on their discussion, these professionals wish to put out the following statement for consideration by national policy makers.

- 

The world trading system is in turmoil. Since "liberation day" tariffs were announced in April 2025, the United States has announced country-specific tariffs that diverge from the principle of most-favoured nation (MFN) trade. Average US tariffs on imports from the world reached 17.4% in September 2025, the highest level since 1935.

This abrupt change has fueled a surge in global economic uncertainty. The World Uncertainty Index has risen from 21,424 in August 2024 to 105,558 in August 2025, a five-fold increase. This uncertainty weighs heavily on the world economy, distorts investment decisions and undermines sound economic decision-making. The overall uncertainty, although emanating from tariffs on goods, also affects trade in services.

The CSEP-Trade Sentinel Tariff Impact Tool shows a mixed picture for South Asian countries. India's exports to the US are projected to suffer significantly as a result of the combined 50% tariff (25% reciprocal plus 25% punitive). Nepal and Pakistan show modest gains, while Bangladesh and Sri Lanka face export losses.

For Bangladesh and Nepal - due to graduate from least developed country status in 2026 the current environment of uncertainty in the international trade landscape compounds the challenges of sustainable graduation.