By Nirmal P. Acharya

The tariff war initiated by the US can only be described as inconsistent and incoherent up to now.

Almost every morning when we wake up, we find that the US tariff policy changing again and again. On April 12, US President Trump posted on his social media that he would grant “exemptions” to some goods from tariffs. On April 13, he again posted on social media that the US government had not announced any tariff exemptions and that the relevant products had merely been moved to another tariff category.

US Commerce Secretary Penny Pritzker said that the tariff exemption for some electronic products is only “temporary”. American media described that the latest remarks by Trump and Pritzker have made the tariff policy of the Trump administration even more chaotic.

China has long made predictions about the behavior pattern of the US government. It has already declared that it will “ignore” the further tariff policy rhetoric announced by the US government.

However, in the context of the Sino-U.S. trade war, Nepal, as an inland country located in the Himalayan region, needs to adopt multi-dimensional strategies to cope with the complex situation. Here are nine specific suggestions based on geopolitical and economic realities:

I. Upgrading Plan for Strategic Corridors

1. Accelerating the Construction of the Cross-border Railway between China and Nepal. Speed up the feasibility study for the cross-border railway between China and Nepal, and strive to start the construction of key sections before 2025. Simultaneously plan the railway economic belt, build cross-border cooperation demonstration zones at border ports, and introduce China’s cold chain logistics technology to develop the export processing of plateau characteristic agricultural products.

2. Digital Silk Road South Asia Node. Build a regional data center in Kathmandu to handle the South Asian business of Chinese digital economy enterprises. Cooperate with Chinese telecommunications enterprises to achieve 4G network coverage in all towns within 2024, laying the foundation for cross-border e-commerce.

II. Economic Resilience Construction Project

1. Cultivation of Import Substitution Industries. In response to Nepal's annual import of 3.5 billion US dollars worth of petroleum products, build a pilot project for solar hydrogen production in the Mustang area. Relying on China's electrolyzer technology, plan to achieve a 5% target for hydrogen energy in energy consumption by 2026.

2. Breakthrough Plan for the Pharmaceutical Industry. Taking advantage of the negotiation opportunity of the China-Nepal Free Trade Agreement, establish a traditional herbal medicine research and development center in Pokhara. Introduce China’s AI-assisted drug screening technology to promote the international certification of medicinal resources such as Cordyceps sinensis from the plateau.

III. Regional Cooperation Innovation Model

1. Construction of Cross-border Power Alliance. Establish a Himalayan Hydropower Community with Bhutan and Bangladesh, and utilize China’s ultra-high voltage technology to achieve interconnection of regional power grids. Seek support from the Asian Infrastructure Investment Bank (AIIB) to increase Nepal’s hydropower transmission capacity from the current 356MW to 1500MW by 2027.

2. Disaster Economic Corridor Initiative. In response to the frequent occurrence of earthquakes, we will cooperate with China and India to establish a regional emergency material reserve network. An international rescue training center can be set up in Lumbini to develop disaster prevention technology industries and transform disaster response capabilities into economic growth points.

IV. Institutional Openness Strategies

1. Border Free Trade Pilot Zones. Implement the “one inspection for both countries” customs clearance model at the Jirsova Border Crossing and pilot direct settlement in RMB/Indian Rupee. Introduce Chinese cross-border e-commerce platforms and build a live-streaming e-commerce base targeting the South Asian market.

2. High-altitude characteristic standard system. Cooperate with Chinese quality inspection institutions to formulate international standards for Himalayan mineral water and hand-woven textiles. Complete the geographical indication certification for 10 types of agricultural products within 2025 and establish a blockchain platform for quality traceability.

V. Geopolitical Balance Wisdom

1. Global Talent Circulation Program. Establish the “Himalayan Scholars” program, sending 500 technical personnel to China each year for digital technology training, while inviting 200 Chinese experts to conduct ecological research in the Himalayan region. Set up the “Belt and Road Initiative” Risk Research Center at Kathmandu University.

2. Construction of Cultural Buffer Zones. Re-launch the Buddhist Cultural Corridor from Kathmandu to Lhasa to Colombo, and develop cross-border meditation tourism routes. Produce a film and television work jointly with China titled “The Travels of Xuanzang in the Western Regions” with Nepal as the setting, and strengthen the modern dissemination of the bond of civilizations.

Under the current circumstances, Nepal should seize three strategic windows of opportunity: the technological spillover window brought about by China's industrial upgrading, the infrastructure dividend period accelerated by regional connectivity, and the industrial transition and adoption period for global supply chain reconfiguration. Through institutional innovation, Nepal can transform its geographical disadvantages into hub advantages and achieve development breakthroughs on the basis of safeguarding sovereignty. However, special attention should be paid to debt sustainability. It is suggested that when introducing Chinese infrastructure capital through the PPP model, a sovereign wealth fund should be established to hedge risks.