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US President Donald Trump announced what he said were “kind” reciprocal tariffs against more than 180 countries on Wednesday, along with a baseline tariff against other countries, delivering the most sweeping tariff package the US has implemented in decades.

The Trump administration has imposed a 10 percent tariff on Nepali products. The United States has granted trade preferential treatment to Nepal, but traders have not been able to benefit from it. 

America is a big trade partner of Nepal. Trade Facilitation and Trade Enforcement Act 2015 provides duty and quota free access to 77 Nepali products. Officials say, Nepal government now will have to talk with America to ensure the smooth export of Nepali products in American markets.

Over the past five years the exports of Nepal to the United States have increased at an annualized rate of 4.98 percent,  from $110m in 2018 to $140m in 2023. 

The United States and Nepal have signed a trade and investment framework agreement, providing a forum for bilateral talks to enhance trade and investment, discuss specific trade issues, and promote more comprehensive trade agreements between the two countries. Principal US exports to Nepal include agricultural products, aircraft parts, optic and medical instruments and machinery. US imports from Nepal include carpets, apparel and jewelry.

The following are the reciprocal tariffs Trump announced on Wednesday. Any countries not on the list will have a baseline 10 percent tariff on any products coming into the US, the administration said.

The tariffs charged to the US include currency manipulation and trade barriers, according to information provided by the administration—though the percentages could not be independently verified.

The Trump administration is using tariffs as a tool to dismantle levies imposed by other countries and create “truly free and open global trade,” a director with The Heritage Foundation, a conservative think tank, told CNN. Richard Stern, director of Grover M Hermann Center for the Federal Budget at The Heritage Foundation, said other countries have deployed trade barriers, subsidized their products and committed intellectual property theft.

President Donald Trump’s historic tariff announcement will have a lasting impact on South Asia, where the US is a top export destination for many countries in the region, analysts say.

The region, which includes the world’s most populous country, India, as well as Pakistan, Bangladesh and Sri Lanka, is “dealing with varying levels of economic stress,” he said. “There’s a lot of vulnerability, and the tariffs will hit hard,” said Michael Kugelman, South Asia Institute Director at The Wilson Center, a US-based think tank.

The government has paved the legal way for the private sector to build and operate industrial zones.

These facilities, operated by the private sector, will enjoy the same benefits as government-run industrial zones, as per the Industrial Zone Declaration and Operation Work Procedure, 2025 approved last week. The work procedure was approved following a minister-level decision.

The new legal arrangement is expected to complement the government’s ‘One Local Unit, One Industrial Zone’ program announced in 2018. Although 120 out of 753 local units had announced plans to build industrial zones under the program, only three–Mellekh of Achham, Anbukhaireni of Tanahun and Madane of Gulmi– have operational industrial zones at present.

Since the government’s vision of building at least one industrial zone in each local unit has failed to materialize due to lack of interest from local governments, the government is now bringing the private sector on board.

According to industry ministry officials, the new work procedure allows private investors to acquire land, and develop, construct, operate and manage industrial zones in coordination with local governments.

Private companies interested to invest in industrial zones must apply to the concerned local governments with documents such as a pre-feasibility study report, land ownership documents, survey report, and a commitment letter to operate the industrial zone for at least 20 years.

If the local government deems the proposal feasible, it will recommend that the ministry declare the area as an industrial zone. The ministry will then submit the proposal to the cabinet for approval under Section 55 of the Industrial Enterprises Act.

The private sector can also build industrial zones through partnerships with local governments. Firms may develop zones by entering into land-leasing agreements with local governments or forming partnerships with local governments. The work procedure also permits local governments to hire private entities to manage industrial zones built by them.

These zones should be spread over at least 25 ropanis of land in mountainous districts, 35 ropanis in hilly districts, and seven bighas in Tarai districts. Sites selected for industrial zones should be at least 500 meters away from human settlements, should have access roads with 10-meter width, and an 11 kVA electricity supply. Only micro, cottage, and small industries are eligible to operate in these zones, with priority given to enterprises run by women, youth (below 30), or foreign returnees.

Prime Minister KP Sharma Oli has said the three pillars of the BIMSTEC Summit - Prosperity, Resilience and Openness - not only align with the Sustainable Development Goals, but also resonate deeply with Nepal's national aspiration of 'Prosperous Nepal, Happy Nepali'.

Addressing the BIMSTEC Summit in Bangkok of Thailand today, Prime Minister Oli stressed that BIMSTEC must not only navigate the changing tides but also seize the opportunity to reinvigorate our regional cooperation.

"I believe that the theme of the Summit –Prosperous, Resilient and Open BIMSTEC, provides us with that compass –a compass that is pro people, pro prosperity and pro welfare," he argued.

The Prime Minister mentioned, "Building an integrated Bay of Bengal region is a must to unlock our potential and capitalize on the complementarities we possess.  Additionally, recognizing that not all economies in our region are equal, we must extend preferential support to Member States with special needs to enable them to share common prosperity."

Saying that climate change has posed an existential threat to entire humanity, he opined that for Nepal, the stakes are even higher. Our high Himalayas are perennial water towers and cooling stations of Asia.

Nepal’s economy is projected to grow 4.5 percent in FY25, up from 3.9 percent in FY24, despite significant natural disasters in late 2024. Growth is expected to be driven by increased domestic trade, hydropower generation and paddy production, according to the World Bank’s latest Nepal Development Update: Leveraging Resilience and Implementing Reforms for Boosting Economic Growth, released on Thursday.

The report also forecasts that Nepal’s economy will grow at an average annual rate of 5.4 percent in FY26 and FY27, driven largely by the services sector.

“Boosting private sector-led economic growth is critical to creating the jobs that Nepal needs. To achieve this, Nepal can build on its impressive track record of resilient growth backed by implementing key structural reforms,” said David Sislen, World Bank Country Division Director for Maldives, Nepal, and Sri Lanka.

The report highlights downside risks to the economic outlook, including geopolitical and trade-related uncertainty. It also points to the potential further deterioration of asset quality in Nepal’s financial sector, the risk of policy inconsistency arising from frequent bureaucratic changes in the government, and delays in the execution of the capital expenditure budget.

“The Nepal Development Update provides valuable insights on recent economic developments and highlights Nepal’s resilient growth. Boosting growth further to meet the country’s 16th Plan targets requires effective execution of the capital budget and timely completion of ongoing projects,” said the Vice-chairperson of the National Planning Commission, Shiva Raj Adhikari. The Nepal Development Update, produced biannually, offers a comprehensive analysis of key economic developments over the past year, placing them within a long-term global context.