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

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.