US Tariffs Slow South Asia, Thailand Export Growth in 2026

The World Bank has lowered its economic growth forecast for South Asia in 2026 from 6.4% to 5.8%, attributing the slowdown largely to higher U.S. tariffs imposed on exports from countries including India, Bangladesh, and Sri Lanka. U.S. President Donald Trump's tariffs, such as the 50% levy on many Indian goods, notably impact labor-intensive sectors and have led to reduced manufacturing competitiveness by increasing import costs for components and raw materials. While India is expected to remain the fastest-growing major economy globally, its growth projection for 2026-27 was trimmed to 6.3% due to these trade barriers. Similarly, Thailand's export growth has sharply slowed, with U.S. tariffs and global trade shifts disrupting key markets like China and Switzerland, causing a trade deficit despite strong electronics and gold exports. Thailand faces ongoing risks from complex U.S. tariff structures affecting a significant portion of its exports, contributing to economic uncertainty and slowing growth momentum in the region. These developments highlight the broader impact of U.S. trade policies on South Asian and Southeast Asian economies' growth trajectories and export performances.