Southasia and the Trump tariffs – Southasia Weekly #77

This week in Himal

As the US imposes tariffs on dozens of countries’ exports, Joshua Yang writes that China now sees an opportunity to modify, if not supplant, the current world order in its favour, in a review of Simon Curtis and Ian Klaus’ recently published book, ‘The Belt and Road City’. 

In a deeply personal essay, Anupam Debashis Roy writes about his family’s long quest for caste emancipation and freedom from religious discrimination in Bangladesh and colonial Bengal. 

Filmmaker Saeed Mirza talks about how the Hindu Right in India is rewriting history and scripting one-sided narratives through cinema, in episode 9 of ‘Partitions of the Heart: Conversations with Harsh Mander.’ 

For the upcoming episode of the State of Southasia podcast, host Nayantara Narayanan speaks to researcher and author Maximillian Morch on Bhutan’s ambitious Gelephu city project, which is being built on the former home of displaced lhotshampas. 

This week in Southasia

On 1 August, US President Donald Trump imposed tariffs ranging from 10 to 41 percent on dozens of countries' exports. The announcement came after weeks of frenetic negotiations across Southasia in a bid to secure lower tariffs. On 31 July, the US announced a deal with Pakistan to tap the country’s oil reserves. The next day, the US imposed a 19 percent tariff on Pakistan’s exports, lower than the initially announced rate of 29 percent, likely as a result of the deal.

India’s negotiations were less successful. A day before the 1 August deadline, Trump posted on social media that the US would impose a 25 percent tariff on goods imported from India, plus a penalty, for purchasing military equipment and oil from Russia. The news led to a fall in the value of the Indian rupee, with economists predicting that India’s economic growth could dip to a rate of less than 6 percent as a result. Five Southasian countries - India, Pakistan, Bangladesh, Sri Lanka and Myanmar - had last-minute adjustments to the tariffs imposed, as a result of negotiations. 

On 25 July, the US Treasury department lifted sanctions on key allies of Myanmar’s military junta, even as the Trump administration heard competing bids on access to Myanmar’s rare earth metals (although Myanmar has been hit with a 40 percent tariff, in keeping with bipartisan bills passed by US Congress pledging continued financial sanctions on Myanmar’s military junta).  Bangladesh announced a government-to-government deal with the US to purchase 220,000 metric tonnes of wheat and ordered 25 Boeing aircraft in an effort to ease trade tensions, with the US imposing a 20 percent tariff, negotiated down from 37 percent. 

These negotiations only serve to highlight the impact that higher US tariffs will have on Southasia’s economies. The talks have been fraught with uncertainty, as Trump’s initial announcement of a 9 July deadline was eventually extended to 1 August. And in the process of negotiations, the US has shown willingness to bargain for favourable trade terms, in exchange for lower tariffs. Trump’s last-minute imposition of 25 percent tariffs on India undermines the narrative of India-US relations as founded on mutual understanding, exposing deep structural tensions.

The US’ inward-looking policies may present an opportunity for other countries to make inroads in the region. On 24 July, India and the UK signed a trade deal in a bid to boost both country’s exports. China may also attempt to capitalise on fraying goodwill over the tariffs. Given this context, Amantha Perera’s article from March 2025 and last week’s State of Southasia podcast with economist Umesh Moramudali are worth revisiting. 

From the archive (March 2025)