What does the world's only superpower gain by punishing one of the world's poorest countries?

Plenty. It mollifies the powerful Tibet lobby back home and defends controversial United States economic interests. Private investors close to the US establishment, legislators and lobbyists sympathetic to the Tibet cause have been retaliating against Nepal for the deportation of 18 Tibetan refugees last month, and over a payment dispute in the joint-venture Bhote Kosi hydropower project.

A move in the US Senate to withdraw a bill granting Nepali garments duty and quota free imports was already on the cards from powerful Texan investors involved in Bhote Kosi. (See 'The price we pay for power', #142). But the Tibetan deportation was the last straw for legislators backing the garment quota bill.

In this David vs Goliath contest Nepal is being punished with threats of aid cut-off, tourism boycotts, and withdrawal of trade privileges. ('Tibet Tibet'). "The United States uses human rights or terrorism whenever and wherever it suits their national interest," explains political science professor Dhurba Kumar at Tribhuban University. "This latest US pressure on Nepal is designed for that purpose."

The reaction over the deportations in the United States is seen by some Nepalis as being disproportionate, selective and hypocritical. "Nepal has taken care of 100,000 Bhutani refugees for 12 years, Bhutan is about to wash its hands off them, and yet when 18 Tibetans are deported all hell breaks loose," one Bhutani refugee in Kathmandu told us.

Senator Dianne Feinstein (D-Calif) who withdrew the garment import bill is the wife of businessman Richard C Blum, chairman of the American Himalayan Foundation that helps Tibetan refugees in Nepal. Citing the deportations in a letter to the Royal Nepali Embassy in Washington, Feinstein wrote: ".under these circumstances, I do not believe I can in good conscience proceed at this time to move the Nepalese garment legislation in the US Senate."

In Kathmandu, it is clear the deportations were carried out under pressure from Beijing. But the government, already beholden to Washington for military hardware, is in full damage-control mode. A senior cabinet member told us: "We have decided it was a mistake, and are trying to convince the Americans it will not happen again."

The government seems convinced that the bill can be revived if Nepal atones for its sins, but it must do this without putting off China. "The ball is in Nepal's court," says Constance Jones, a US embassy spokesperson in Kathmandu. "It must start lobbying for the bill with Senator Feinstein and the US Congress right away."

But for some foreign policy analysts in Kathmandu, this is classic American arm-twisting. "The Americans know perfectly well Nepal has to live with China," said one source. "But because they can't punish China, they bully little Nepal just to show their domestic Tibet lobby that they are doing something."