Apparel industry faces shock as US imposes high tariffs

Friday, 4 April 2025 03:16 - - {{hitsCtrl.values.hits}}

JAAF Secretary General Yohan Lawrence says tariff level is ‘extremely high’ relative to regional competitors
Asserts impact will be swift and severe
Opines bulk of US business will migrate to competitor markets; volume of business simply cannot be replaced via other markets
States situation is serious, must be addressed as a matter of national urgency
Commends immediate actions taken by Govt. to discuss situation; engages with authorities on way forward

JAAF Secretary General Yohan Lawrence

Sri Lanka’s apparel industry is bracing for a severe economic shock following the US’s announcement of steep new tariffs under its Reciprocal Tariff policy.

On 2 April US President Donald Trump announced the move which imposes a 10% baseline tariff on all imports starting 5 April, will escalate to a 44% reciprocal tariff specifically targeting Sri Lankan exports from 9 April.

“This tariff level is extremely high relative to our regional competitors,” said Joint Apparel Association Forum (JAAF) Secretary General Yohan Lawrence.

“Sri Lanka could very quickly see its share of US business move to countries with lower tariffs than Sri Lanka has.”

The United States is Sri Lanka’s largest single-country apparel market, accounting for over 40% of the sector’s total exports, which exceeded $ 5.5 billion in 2023.

“With tariffs coming into effect almost immediately, the impact will be swift and severe. Potentially, we could see the bulk of our US business migrate to competitor markets,” Lawrence added. “This volume of business simply cannot be replaced through other markets.”

The Government of Sri Lanka has already initiated consultations with the industry and other stakeholders to determine an appropriate course of action.

“We are very appreciative of the immediate actions taken by the Government to discuss this situation and are working very closely with the authorities to see how best we could address the concerns raised by the US Government, whilst staying within the limitations of Sri Lanka’s ongoing IMF program,” said Lawrence.

Despite this challenge, the apparel sector remains committed to transparency, ethical production, and sustainable value creation.

“Our focus now is on engagement, agility, and ensuring Sri Lanka remains a trusted sourcing destination,” Lawrence said. “However, this situation is serious, and it must be addressed as a matter of national urgency.”

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