Sri Lanka’s apparel industry has expressed deep concern over the new Reciprocal Tariff policy announced by the U.S. government, cautioning that the move could severely disrupt the country’s largest export sector.
The Reciprocal Tariff policy announced by U.S. President Donald Trump on April 2, imposes a universal baseline tariff of 10% tariff on all imports into the USA effective April 5.
Come April 9, this will then increase with each country being given a tariff rate dependent on the US Government’s view on “Tariffs charged into the USA”. For Sri Lanka, this will see the baseline 10% increasing to 44% for Sri Lanka.
“This tariff is significantly higher than what our regional competitors face,” said Yohan Lawrence, Secretary General of the Joint Apparel Association Forum (JAAF). “We could see a rapid shift in U.S. sourcing away from Sri Lanka, which would be extremely difficult to recover from.”
The United States remains Sri Lanka’s largest apparel export market, accounting for over 40% of the sector’s exports, which exceeded USD 5.5 billion in 2023.
In response to the development, JAAF commended the Government of Sri Lanka for its prompt action, including the establishment of a working group to assess the wider economic impact of the U.S. decision.
“We appreciate the urgency with which the Government has responded,” said Lawrence. “We are working closely with the relevant authorities to determine a constructive path forward that also remains consistent with Sri Lanka’s ongoing IMF programme.”
The working group is currently finalizing a proposal that will be presented to His Excellency the President later today. JAAF emphasized the importance of acting quickly and expressed confidence that, with the support of the President, decisive measures would be taken in the national interest.
Despite this setback, Sri Lanka’s apparel industry remains firmly committed to its core values of ethical manufacturing, transparency, and sustainable growth.
