Sri Lanka’s apparel sector is sounding the alarm over a new Reciprocal Tariff policy introduced by the United States government, which threatens to severely impact the country’s largest export industry.

The policy, announced by US President Donald Trump on 2 April, establishes a baseline tariff of 10% on all imports into the United States, effective 5 April. By 9 April, this will increase further for individual countries based on how the US perceives their own tariff policies. For Sri Lanka, the new tariff rate will rise sharply to 44%, placing its exports at a significant disadvantage.

“This tariff is significantly higher than what our regional competitors face,” said Yohan Lawrence, Secretary General of the Joint Apparel Association Forum (JAAF). “We could see a rapid shift in US sourcing away from Sri Lanka, which would be extremely difficult to recover from.”

The United States remains Sri Lanka’s largest apparel export market, accounting for over 40% of the sector’s exports, which exceeded USD 5.5 billion in 2023.

In response to the policy, JAAF has welcomed the Sri Lankan government’s swift action, including the formation of a working group to evaluate the broader economic implications.

“We appreciate the urgency with which the Government has responded,” Lawrence added. “We are working closely with the relevant authorities to determine a constructive path forward that also remains consistent with Sri Lanka’s ongoing IMF programme.”

A formal proposal from the working group is expected to be submitted to the President later today. JAAF reiterated the need for quick and decisive action, expressing confidence that the government would support the sector in navigating this crisis.

Despite these challenges, Sri Lanka’s apparel industry remains committed to ethical manufacturing, transparency, and sustainable growth.

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