Based on the latest updates, here's a summary of the tariff situation for Nepal, including deals, agreements, and potentially affected companies:

Tariff Status for Nepal (Effective August 1, 2025):

• 10% General Tariff: The US has announced a general 10% tariff on all imports, including from Nepal, effective August 1, 2025. This is a significant change, as many Nepali products have historically enjoyed duty-free access to the US market.

• Nepal Trade Preference Program: The Nepal Trade Preference Program, which granted duty-free access to 77 specific items (including textiles, footwear, clothing, and fodder-related products) to support Nepal's economic recovery after the 2015 earthquake, is set to expire in December 2025. This expiration, combined with the new general tariff, will further impact Nepali exports.

Deals and Agreements:

• Ongoing Negotiations: The US administration has indicated that these tariffs are part of a broader strategy to renegotiate trade relationships and address perceived trade imbalances. While the August 1 deadline is firm for the imposition of tariffs, President Trump has stated that he is open to negotiations with countries if they are willing to make "fair deals" and revise their trade policies.

• Nepal's Trade Policy 2025: Nepal has rolled out a new Trade Policy 2025 aimed at boosting the competitiveness of domestic products and addressing its soaring trade deficit. This policy focuses on increasing value addition, improving quality standards, adopting innovative technologies, and strengthening bilateral and multilateral trade negotiations. Nepal is also looking to forge bilateral agreements with trading partners as it prepares to graduate from Least Developed Country (LDC) status in 2026.

Impact on Companies and Sectors:

The new tariffs are expected to significantly impact Nepali companies, particularly those exporting to the US under the previous duty-free regime.

• Hard-Hit Sectors:
  Carpets: Hand-knotted carpets are one of Nepal's top exports to the US, and this sector is particularly worried. The 10% tariff could force exporters to absorb costs or lose market share.
  Dog/Cat Food (Chhurpi): Nepal exports a significant amount of Chhurpi (hard cheese) to the US, primarily sold as dog chew. This product, previously duty-free, will now face the new tariff.
  Textiles and Garments (RMG): While the Nepal Trade Preference Program included 56 textile and 9 clothing products, the general 10% tariff and the program's impending expiration will create new challenges for this sector.
  Pashmina, Felt Goods, Essential Oils, Antiques, Handmade Paper, Cotton Bags: These are other key Nepali export products that will be affected.

• Concerns for Competitiveness: Nepali producers are concerned that the 10% duty, combined with their already high cost of production, will make their products less competitive in the international market.

• Industry Associations Seeking Intervention: Organizations like the Garment Association of Nepal (GAN), Nepal-USA Chamber of Commerce and Industry (NUSACCI), and Nepal Carpet Manufacturers and Exporters' Association (NCMEA) are reportedly seeking government intervention to facilitate negotiations with the US.

• Potential "Silver Lining" for Some: Some analysts suggest that the new tariffs, particularly the significantly higher rates imposed on other Asian economies like Vietnam, Indonesia, and China, could temporarily improve the competitiveness of Nepali goods for certain niches. This might encourage some companies to consider Nepal as a manufacturing and export hub to bypass higher US tariffs in other countries.

• Foreign Investment Potential: Nepal's relatively lower tariff rate compared to other Asian countries might also attract manufacturers from South Asian countries like India, Sri Lanka, and Bangladesh to establish joint ventures or manufacturing facilities in Nepal to lower their tariff exposure in the American market. The World Bank and Nepal Economic Forum have also highlighted the importance of attracting foreign direct investment (FDI) and improving the business environment through continuous reforms to boost exports and economic growth.

In summary, Nepal is facing new trade challenges with the imposition of general US tariffs and the nearing expiration of its preferential trade program. While there's an acknowledgment of potential for negotiation and a slight competitive edge over some other heavily-tariffed nations, the immediate impact on key export sectors and companies is expected to be significant.