Sri Lanka’s president has appointed a committee to “conduct an in-depth study” on the impact of newly announced tariffs by United States President Donald Trump, which sent global shockwaves on Wednesday.
Hours after Trump’s announcement of sweeping ‘reciprocal tariffs’ on over 180 countries, including a 44% tariff on all Sri Lankan goods, Anura Kumara Dissanayake said a high level committee would be formed to examine any “potential issues that may arise”.
The United States is Sri Lanka’s single largest export destination, particularly for apparel and rubber products, which are now set to face steep cost increases in the American market.
In response, Sri Lankan Industries Minister Sunil Handunetti sought to ease concerns. “We do not think immediately there will be a threat,” he told reporters. “There could be opportunities from trade disruptions with other countries.”
The government is reportedly working on a new tariff policy and exploring free trade agreements with countries including Malaysia, Indonesia, Japan, Korea, and others in the Asia-Pacific and Middle East, he claimed. Handunetti added that discussions were also ongoing to improve trade relations with India.
Despite the apparent optimism, economic officials acknowledged the risks. Sri Lanka’s Joint Apparel Association Forum warned of serious consequences if action is not taken. “Sri Lanka could very quickly see its share of U.S. business move to countries with lower tariffs,” said Secretary General Yohan Lawrence. “This situation is serious, and it must be addressed as a matter of national urgency.”
Deputy Minister Jayantha also acknowledged that the tariffs could negatively affect key exports, particularly apparel and food sectors, and reduce national export revenue.
“If the United States follows a global policy on reciprocal tariffs and we do not have the opportunity to renegotiate the terms, we will have a number of other options. For instance the GSP Plus preferential tariff system. We plan to engage the US in diplomatic talks to build a long-term partnership that fosters better trade and investment policies, benefiting both our nations,” he said.
The sharp blow seemed to catch Sri Lankan officials by surprise, despite reports that Sri Lankan was sending a delegation to the US to see how it could avoid the tariffs.
