Sri Lanka faces renewed economic uncertainty as steep U.S. tariffs risk destabilizing its crucial apparel export sector. The 54% total levy imposed last week – combining 44% import duty and 10% base tariff – arrives as the island nation struggles to recover from its worst financial crisis since independence.
The new measures directly impact $3 billion worth of Sri Lankan exports to its largest single market, predominantly textiles and garments. With apparel accounting for 44% of total exports and supporting 1.36 million direct and indirect jobs, analysts warn the tariffs could unravel recent stabilization efforts.
"This isn’t just about trade balances – it’s about families losing their lifelines," said Yasiru Ranaraja, a Colombo-based international development expert. Rural communities face particular risk, with women comprising 85% of garment workers in an industry that provides rare economic mobility opportunities.
The tariffs compound existing challenges for Sri Lankan manufacturers already competing with regional rivals like Vietnam and Bangladesh. Exporters now face tough choices between absorbing shrinking margins or cutting production costs – neither sustainable for an industry critical to the nation’s $89 billion economy.
