With the latest U.S. election in the spotlight, it’s easy to wonder: How does this affect Nepal?The U.S. elections may feel like something far off, but what happens there affects us here in more ways than we realize. From foreign aid to climate commitments, the election outcome will likely influence Nepal's economy, climate response, and even our daily lives. 

So, let’s dive into how a Trump presidency might play out for Nepal!

A Bit of Background on Nepal-U.S. Relations

Over the years, the United States has been an important partner to Nepal, especially by providing financial aid to help us improve our healthcare, education, and infrastructure (roads, bridges, and other major projects). Through programs like USAID, the U.S. sends millions of dollars that help people in remote areas get medical care and schooling. There’s also the Millennium Challenge Corporation (MCC) agreement, which promised $500 million to improve Nepal’s energy sector and build roads—money that’s very helpful, despite criticisms of the program.

Less Focus on “Aid,” More Focus on “America First”

If Trump returns to his “America First” policy, it could mean fewer contributions to foreign aid programs. The “America First” approach focuses more on spending money within the U.S. rather than sending it abroad. During Trump’s last term, foreign aid budgets were significantly reduced, and if the same route is to be taken again, it could mean less support for healthcare, education, and infrastructure projects in Nepal.

This aid is important because it helps bring healthcare and schools to parts of the country that need it most. For instance, USAID funds have been a big help for healthcare in rural areas. If those funds are cut, it could mean fewer resources for doctors, nurses, and medical supplies. Additionally, the $500 million from the MCC helps Nepal improve energy infrastructure, which means better access to electricity. Without this funding, progress in these areas might slow down.

Climate Commitments (Or Lack Thereof): Why It Matters to Nepal

Trump has often said that he prioritizes business growth over climate commitments, which means he may not focus as much on fighting climate change. During his first term, he even pulled the U.S. out of the Paris Climate Agreement—a global pact to reduce carbon emissions. For a country like Nepal, that decision can be worrying.

Nepal is especially vulnerable to climate change. Our glaciers are melting, and changing weather patterns are making farming more difficult. When the U.S. supports climate action, it helps countries like Nepal get access to funds and resources for things like flood management, renewable energy, and helping farmers adapt to new climate realities. Without that support, Nepal could struggle to protect our environment and food supply.

Geopolitics: Nepal’s Position Between Big Powers

Nepal has a unique position on the map. We’re located between two giant neighbors—India and China—who often have competing interests. Navigating these relationships is already complicated, and a Trump presidency might make it even trickier.

Trump has a history of taking a tough stance on China. Nepal has a partnership with China through a project called the Belt and Road Initiative (BRI). The BRI is a huge Chinese plan to build roads, railways, and other infrastructure in countries around the world, including Nepal. By working with China, Nepal hopes to improve its own roads, transportation, and energy. However, some people worry that borrowing from China for these projects could put Nepal in debt to China.

If Trump decides to take a tough approach on China, it could pressure Nepal to choose sides. In the past, Nepal has balanced its relationships with China, India, and the U.S. to avoid taking one side too strongly. But if Trump’s policies create more tension, Nepal may find it harder to balance its relationships with these three big players.

Trade: Will Nepali Exports Be Affected?

The United States is an important trade partner for Nepal. Every year, we export around $100 million worth of goods to the U.S., mainly textiles, garments, and carpets. These exports help create jobs and bring foreign money into Nepal’s economy. Many Nepalis work in the textile industry, and selling to the U.S. helps support their families.

If Trump’s “America First” approach brings higher tariffs (20% tariff on imports from all countries) or stricter trade rules, it could make it harder for Nepali goods to reach the U.S. market. This would be a setback for our economy, especially for the textile sector, which employs thousands of Nepalis. Fewer exports could also mean less foreign currency for Nepal, which would make it harder to buy imported goods like fuel and medicine.

Immigration and Remittances: How Nepalis in the U.S. Could Be Affected

Remittances, or the money sent back home by Nepalis working abroad, make up nearly a quarter of Nepal’s economy. A lot of these remittances come from Nepalis working in the U.S., which helps families back home afford basic needs, healthcare, and education. Trump has been known for his strict immigration policies, so if he resumes this approach, it could affect Nepalis in the U.S., making it harder for them to work there.

Fewer job opportunities in the U.S. would mean fewer remittances coming back to Nepal, which would be tough for many families. It could also make it harder for Nepali students to study in the U.S., which has long been a popular destination for higher education. This would limit opportunities for young Nepalis to gain new skills and knowledge.

US Dollar May Get Stronger

On the flip side, the US Dollar may get stronger resulting in higher remittances in local currency. The “America First” approach focuses on boosting the U.S. economy, often strengthening the value of the dollar in global markets. For Nepal—a country that relies heavily on remittances, a stronger dollar means that money sent home by Nepalis working in the states would amount to more in terms of Nepali currency. And the USD earnings by Nepali businesses and freelancers will further add to this. 

The boost in remittance could act as a safety cushion for families here, helping them afford rising prices or make investments in education, housing or small businesses.

Additionally, it would also boost Nepal’s foreign currency reserves, which are crucial for importing goods into the country. 

On the other hand, a stronger dollar can make imports more costly for Nepal as we import almost everything. The increase in remittances could balance this effect though, at least partially. 

All in all, Trump’s presidency could be a mixed bag for Nepal’s economy. 

Are There Any Other Potential Upsides?

Interestingly, a Trump presidency might offer a few opportunities for Nepal, at least geopolitcally. If Trump sees Nepal as a way to counter China’s influence in the region, he might actually increase investment here, especially in areas like infrastructure and energy. This could bring in funds that create jobs and improve our economy, but Nepal would need to carefully manage these investments.

Also, if U.S.-China tensions rise, Nepal could gain a little more leverage to negotiate with both sides. With smart diplomacy, Nepal could use this situation to work out better deals with both China and the U.S., potentially benefiting from both relationships.

But the million dollar question is if Nepal can actually leverage such situations with the current leadership!

So, What Lies Ahead?

In short, a Trump presidency could bring changes and challenges for Nepal, affecting everything from healthcare funding and climate resources to trade and diplomatic relations. But Nepal has more internal issues to sort out than to be really wary about what a Trump Presidency would mean. Given the political instability resulting from a fractured mandate in the last general elections and the growing unpopularity, the political leadership in Nepal will be least bothered about who is in the White House and instead focus on how to save their own political career. However, the stakes are high, and Nepal’s own internal issues will continue to bother us more than Trump's Presidency in the US.