Thursday Aug 14, 2025
Thursday Aug 14, 2025
Thursday, 14 August 2025 00:22 - - {{hitsCtrl.values.hits}}
US tariffs on Sri Lankan exports have disrupted orders, hitting non-apparel exporters the hardest, according to an August 2025 policy brief by the Centre for a Smart Future (CSF).
The report, ‘Trade Policy Uncertainty and Impacts on Sri Lankan Exporters’ authored by Anushka Wijesinha and Senith Abeyanayake, says the period between 2 April and 9 July 2025, when a universal 10% tariff was in effect, was marked by disruption, with only two firms reporting no change in orders.
While none of the apparel sector firms in the survey reported cancellations or postponements, wider industry interviews suggested some Small and Medium Enterprise (SME) exporters had experienced them.
An apparel sector interviewee told the CSF that, unlike during COVID-19, when buyers paused all orders, buyers in this period were focused on how the tariff burden would be shared. Non-apparel exporters, including those in tea, rubber, spices, essential oils, extracts, and oleoresins, all reported facing immediate cancellations, postponements, or high uncertainty.
The US is Sri Lanka’s largest export market, accounting for 27% of total manufactured exports amounting to $ 12.8 billion in 2024, with textiles and apparel making up 64% of US-bound shipments.
Sri Lanka first heard of a 44% country-specific tariff on 2 April, followed by a 90-day pause announced on 9 April. A universal 10% tariff took effect on 5 April. On 9 July, Sri Lanka was informed that rate would be 30% effective 1 August, but by then, a revised 20% rate was announced by the US.
The CSF survey of 37 senior leaders in export-oriented firms was conducted in late July and early August 2025. Most respondents were from firms employing at least 50 people across 14 sectors, with apparel and textiles being the largest represented sector.
For some respondents (9 of 37), the focus since 2 April had been predominantly on immediate crisis management. More senior leaders (16 of 37) balanced immediate crisis management with medium-term growth initiatives.
Large apparel exporters with production in other regions said mitigating risks from global trade policy and geopolitical shifts was part of standard strategic planning, citing past experiences such as the loss of Ethiopia’s eligibility under the African Growth and Opportunity Act in 2022.
At a press briefing after the end of the 90-day pause and the July tariff changes, International Trade Centre Executive Director Pamela Coke-Hamilton said the extended uncertainty undermines long-term investment and business contracts, creating further instability.
The brief says firms are yet to understand the indirect impacts of tariff announcements, and that the Government is aiming to secure technology transfer and broader market access as part of ongoing talks with US authorities.
Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.
