Sri Lanka’s apparel sector is bracing for significant economic fallout as U.S. President Donald Trump’s newly imposed 44% tariff on Sri Lankan exports threatens to shift thousands of jobs and billions in business to competing countries. Industry leaders are sounding alarms, warning that the U.S. market could quickly move to lower-cost alternatives, putting the country’s largest export sector at serious risk.
Yohan Lawrence, Secretary General of the Joint Apparel Association Forum (JAAF), expressed grave concern over the new tariffs, which are set to take effect in the coming days. “This tariff level is extremely high relative to our regional competitors,” Lawrence stated. “With tariffs coming into effect almost immediately, the impact will be swift and severe. We could see the bulk of our U.S. business migrate to competitor markets.”
Tariffs to Have Immediate Impact
On April 2, President Trump announced the implementation of a 10% baseline tariff on all imports, followed by a steep 44% “reciprocal” tariff on Sri Lankan exports starting April 9. The move is expected to disrupt the country’s apparel sector, which relies heavily on the U.S. as its largest single export market, accounting for more than 40% of the sector’s $5.5 billion worth of exports in 2023.
“Potentially, we could see the bulk of our U.S. business move to countries with lower tariffs than Sri Lanka has,” Lawrence warned, emphasizing that the volume of business at stake cannot be easily replaced by other international markets.
Sri Lanka’s Apparel Sector Faces Unprecedented Challenges
The Sri Lankan government has swiftly engaged with the apparel industry and other stakeholders to explore ways to mitigate the effects of the new tariffs. “We are appreciative of the immediate actions taken by the government to discuss this situation,” Lawrence said. “We are working closely with the authorities to find solutions that address U.S. concerns while adhering to the constraints of Sri Lanka’s ongoing IMF programme.”
Despite the looming crisis, the Sri Lankan apparel industry remains committed to upholding its reputation for ethical production, transparency, and sustainable practices. “Our focus now is on engagement, agility, and ensuring Sri Lanka remains a trusted sourcing destination,” Lawrence affirmed. However, he stressed the urgency of the situation, calling for immediate action to prevent the potential loss of thousands of jobs and export opportunities.
Urgency to Find a Solution
As Sri Lanka’s apparel industry faces a critical juncture, all eyes will be on how the government and industry leaders navigate the challenging terrain of U.S. trade policy. The future of thousands of jobs, along with the economic stability of the sector, now hinges on the country’s ability to secure relief from the tariffs.