"South Asia Trade: Back to Square One", 24 February 2026

Heavily negotiated U.S. tariffs and deals were put on hold, following the Supreme Court ruling limiting President Trump’s tariff powers.

It is not one of relief, more like a continuing sigh of frustration coming from sourcing nations across South Asia.

Industry analysts across the region described the latest development as being “back to the starting point.”

Over the past year, exporters have described feeling riled up, confused and angry as they navigated constantly shifting strategies. Sourcing nations were quickly pitted against one another, racing to negotiate better terms while global brands tracked geopolitics and redistributed orders to minimize risk. India, for example, began at a relative advantage with a 27 percent tariff in April 2025, only to see it raised to 50 percent and then potentially reduced to 18 percent earlier this month...

With the Indian delegation’s trip to the States to finalize the deal now on hold, industry leaders said they felt “crushed” at losing their perceived advantage...

In Colombo, the impact is being assessed with equal urgency...

Still, he cautioned that “no one knows where this is going. Business needs stability, and this will once again lead to short-term decisions by the brands,” he added.

In Dhaka, the mood is similarly cautious.

“It did show us the power of the U.S. and the insecurities of the region...” said Mustafiz Hossain, a manufacturer in Dhaka...

There is cautious hope that lower tariffs may reduce costs and stimulate demand, but uncertainty remains the dominant emotion...

On one hand, [Manufacturers] were encouraged that lower tariffs could spur consumption. On the other, they worried that unpredictable policy shifts could alter buying patterns in the short term.

“Tariff fluctuations are causing global retailers to cut down and plan imports in smaller volumes,” said Mahmudul Hasan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA)...

In recent posts on Truth Social, President Trump threatened to use “different tariff powers to levy duties in a much more powerful and obnoxious way,” comments that are now being parsed for potential repercussions...

“The competitive edge between the exporting nations cannot be wished away,” said a leading manufacturer in New Delhi, “but we can perhaps find a way to bolster our own position and combat the uncertainty, instead of letting it divide us further into economic chaos.”