Modeling Asymmetric Regional Trade Responses to Tariff Shocks: A Comparative Analysis of East and South Asia

Modeling Asymmetric Regional Trade Responses to Tariff Shocks: A Comparative Analysis of East and South Asia | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Modeling Asymmetric Regional Trade Responses to Tariff Shocks: A Comparative Analysis of East and South Asia HEMENDRA PAL This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7497873/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Background and Purpose This study investigates how external tariff shocks impact regional economies asymmetrically, with a focus on East and South Asia during the 2025 global tariff wave. Given their differing degrees of global integration, institutional capacity, and trade infrastructure, these regions are ideal for analyzing the structural and policy-driven asymmetries in macroeconomic response. The purpose is to develop a modeling framework that captures these regional differences and to offer actionable insights for designing region-specific policy responses. Methods A dynamic comparative modeling approach is employed, integrating Ordinary Differential Equations (ODEs), Partial Differential Equations (PDEs), and Delay Differential Equations (DDEs) to capture both immediate and time-lagged responses in trade flows, inflation, and fiscal variables. The models are applied to cumulative monthly import data from East and South Asia (2024–2025), with log-transformation used to improve fit and comparability. A “tau” parameter is introduced to represent effective trade friction. Model outputs are validated against empirical projections from the IMF and Asian Development Bank. Results East Asia shows faster, sharper, and shorter-lived trade adjustments, reflecting strong institutional agility and global trade integration. South Asia exhibits slower and more persistent deviations, due to infrastructural bottlenecks and policy rigidity. DDE-based models accurately capture lag structures in East Asia (6–9 months), while simpler models perform better in South Asia, where lag effects are weaker or more diffuse (9–12 months). Tau-reduction policies significantly improve model responsiveness in South Asia. Conclusions The study highlights fundamental asymmetries in the macroeconomic impact of identical trade shocks across regions. It emphasizes the need for tailored trade and institutional policies—trade diversification for East Asia, and procedural/infrastructural upgrades for South Asia. The modeling framework provides a robust tool for future asymmetric trade analysis, reinforcing the importance of recognizing institutional, historical, and structural disparities in global economic policymaking. International Economics Tariff shocks Delayed Differential Equations East Asia South Asia Trade dynamics Time-lag modeling Data transformation. Full Text Additional Declarations The authors declare no competing interests. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7497873","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":507937225,"identity":"1d7c2b9e-f238-4b4a-9efb-4b3f2b740ad7","order_by":0,"name":"HEMENDRA PAL","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAAzUlEQVRIiWNgGAWjYBACAwYGxgMJBhI8bOwNIK4FUVoYDnyosJHj4zkA4koQp+XgjDNpxnISCSA+EVrMpZsfHOZtO5zYJvn86oYfBRIM/O3dCXi1WM45ZgDRIp1TdrMH6DCJM2c34HfYjQS4lrQbPEAtBhK5hLSkf4A67EzazT/EackxAHufTYL92G3ibLlzpgAcyGw8OWy3ZYARRNgvt9s3PgBFpXz78Wc33/yxkeNv78WvBSkieAzAJH7lqFrYHxBWPQpGwSgYBSMSAADHfE2w+tZwNAAAAABJRU5ErkJggg==","orcid":"https://orcid.org/0000-0003-3245-6865","institution":"","correspondingAuthor":true,"prefix":"","firstName":"HEMENDRA","middleName":"","lastName":"PAL","suffix":""}],"badges":[],"createdAt":"2025-08-31 01:58:49","currentVersionCode":1,"declarations":{"humanSubjects":false,"vertebrateSubjects":false,"conflictsOfInterestStatement":false,"humanSubjectEthicalGuidelines":false,"humanSubjectConsent":false,"humanSubjectClinicalTrial":false,"humanSubjectCaseReport":false,"vertebrateSubjectEthicalGuidelines":false},"doi":"10.21203/rs.3.rs-7497873/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-7497873/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":90466485,"identity":"ccc6916f-c244-4aa5-8644-7ab20730a7f1","added_by":"auto","created_at":"2025-09-03 05:33:49","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":1168895,"visible":true,"origin":"","legend":"","description":"","filename":"LaggedResearchforSouthAsiaandEastAsiaAugust2025.pdf","url":"https://assets-eu.researchsquare.com/files/rs-7497873/v1_covered_8ecf49e5-1929-4367-bd6a-844aa71dd052.pdf"}],"financialInterests":"The authors declare no competing interests.","formattedTitle":"\u003cp\u003eModeling Asymmetric Regional Trade Responses to Tariff Shocks: A Comparative Analysis of East and South Asia\u003c/p\u003e","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Tariff shocks; Delayed Differential Equations; East Asia; South Asia; Trade dynamics; Time-lag modeling; Data transformation.","lastPublishedDoi":"10.21203/rs.3.rs-7497873/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-7497873/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003e\u003cstrong\u003eBackground and Purpose\u003c/strong\u003e This study investigates how external tariff shocks impact regional economies asymmetrically, with a focus on East and South Asia during the 2025 global tariff wave. Given their differing degrees of global integration, institutional capacity, and trade infrastructure, these regions are ideal for analyzing the structural and policy-driven asymmetries in macroeconomic response. The purpose is to develop a modeling framework that captures these regional differences and to offer actionable insights for designing region-specific policy responses.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eMethods\u003c/strong\u003e A dynamic comparative modeling approach is employed, integrating Ordinary Differential Equations (ODEs), Partial Differential Equations (PDEs), and Delay Differential Equations (DDEs) to capture both immediate and time-lagged responses in trade flows, inflation, and fiscal variables. The models are applied to cumulative monthly import data from East and South Asia (2024–2025), with log-transformation used to improve fit and comparability. A “tau” parameter is introduced to represent effective trade friction. Model outputs are validated against empirical projections from the IMF and Asian Development Bank.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eResults \u003c/strong\u003eEast Asia shows faster, sharper, and shorter-lived trade adjustments, reflecting strong institutional agility and global trade integration. South Asia exhibits slower and more persistent deviations, due to infrastructural bottlenecks and policy rigidity. DDE-based models accurately capture lag structures in East Asia (6–9 months), while simpler models perform better in South Asia, where lag effects are weaker or more diffuse (9–12 months). Tau-reduction policies significantly improve model responsiveness in South Asia.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eConclusions\u003c/strong\u003e The study highlights fundamental asymmetries in the macroeconomic impact of identical trade shocks across regions. 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