Apparel industry expresses concern over 30% US tariff on Sri Lanka

Friday, 11 July 2025 02:47 - - {{hitsCtrl.values.hits}}

Warns SL faces risk of seeing migration of US buyers to lower-tariff countries
Urges Govt. to continue active engagement with US to secure better deal for Sri Lanka
Says Vietnam is at advantage at 20% tariff, Bangladesh has begun talks to reduce rate from 35%

The apparel industry yesterday expressed concern over the 30% tariff proposed by the US, its biggest market.

US President Donald Trump on Monday announced a 30% reciprocal tariff on Sri Lankan exports from 1 August.

“As one of the country’s largest export earners, the sector relies heavily on access to the US market, and such a steep increase threatens to erode competitiveness, particularly when compared to regional peers,” the Joint Apparel Association Forum (JAAF) said in a statement.

The JAAF noted that Vietnam has already concluded its negotiations and now faces a 20% tariff, while Bangladesh, though at 35%, has already begun negotiations with the US to secure a reduction. India’s position remains under discussion, but early signals suggest it may receive a more favourable rate than Sri Lanka. In all likelihood, Cambodia, another competitor with a tariff rate marginally higher than Sri Lanka, will also be negotiating for a reduction.

“If the 30% tariff stands, we risk seeing a migration of US buyers to lower-tariff countries,” the JAAF warned. “We strongly urge the Government to continue active engagement with the US Trade Representative (USTR) to secure a better deal for Sri Lanka.”

The reduction from 44 to 30% is a recognition of the good faith with which Sri Lanka has been having its dialogue with the USTR, and the JAAF is encouraged by the Government’s comments yesterday indicating that negotiations with the USTR will continue with a sense of urgency ahead of the 1 August deadline, when the 30% will become effective.

The JAAF further stressed that a diplomatic resolution is vital to safeguarding jobs, sustaining market share, and reinforcing Sri Lanka’s position as a trusted partner in global apparel supply chains.

The US remains the largest export market for Sri Lanka, accounting for 27% ($ 3 billion) of total manufactured exports ($ 12.8 billion) as of 2024—out of which textile and apparel exports accounted for 64% of total exports to the US.

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