It is not a given that Nepal will benefit from low US tariffs
Summary
Nepal's widening trade deficit is influenced by high import dependence and remittance-driven consumption, with challenges in scaling up niche exports and leveraging trade agreements and tariffs.
Key Points
- Nepal's trade deficit is widening due to overdependence on imports and remittance-backed consumption.
- Remittances mask structural weaknesses by sustaining consumption without boosting productive capacity.
- Niche export sectors like tea, coffee, and handicrafts struggle to scale due to limited market access and landlocked logistics.
- Nepal risks losing trade concessions after graduating from LDC status, which may hurt export competitiveness.
