CRTA calls for urgent action to safeguard jobs, export earnings amid US’s reciprocal tariffs

• Calls on Govt. to take swift action to address negative impacts of reciprocal tariffs—immediate diplomatic engagement with US authorities, diversification of export markets, support for local rubber farmers and businesses and long-term strategic planning for rubber sector
• CRTA Chairman Harin de Silva says immediate action essential at this critical juncture
• Believes prompt action from Govt., collective collaboration of sectors can mitigate impact

The Colombo Rubber Traders’ Association (CRTA) yesterday expressed deep concern about the recent imposition of a 44% blanket tariff by the US on all imports from Sri Lanka, particularly its devastating impact on the country’s natural rubber industry. 

As one of the country’s key export sectors, the natural rubber industry contributes significantly to both employment and foreign exchange earnings. Since the present tariff is 12.5%, the additional 44% will raise the total tariff to 56.5%, making Sri Lankan rubber exports highly uncompetitive in the US market. This is expected to have a far-reaching impact on rubber tappers, their families, and Sri Lanka’s broader economy.

To mitigate the negative effects of this tariff, the CRTA urges the Government to take the following actions swiftly. These include: 

nImmediate diplomatic engagement with US authorities: The Government must engage with the US Government and relevant trade bodies to negotiate a significant reduction or removal of the 44% tariff.

• Diversification of export markets: The Government should encourage diversification of export markets for Sri Lankan natural rubber to reduce reliance on the US market.
• Support for local rubber farmers and businesses: Immediate financial assistance, subsidies, or relief packages should be provided to affected rubber farmers and businesses to help them survive the economic downturn caused by the tariff.
• Long-term strategic planning for the rubber sector: The Government should work with the CRTA to develop a comprehensive strategy for the future growth and sustainability of the rubber sector, which includes investing in technology, improving supply chain efficiency, and exploring new markets.

The CRTA firmly believes that with prompt action from the Government and effective collaboration between the private and public sectors, the impact of this tariff can be mitigated. “We are at a critical juncture and immediate action is essential. By collaborating with the Government, the CRTA is committed to finding sustainable solutions that will protect the interests of the rubber industry, safeguard jobs, and maintain the vital foreign exchange earnings that this sector contributes to our economy,” CRTA Chairman Harin de Silva said.

“By working together, we can secure a favourable resolution for Sri Lanka’s natural rubber industry and protect the livelihoods of thousands of rubber tappers, their families, and the broader Sri Lankan economy.”

The natural rubber sector in Sri Lanka supports over 150,000 rubber tappers/harvesters, most of whom work in rural areas. These workers, along with their families, depend on the industry for their livelihoods. Moreover, the rubber industry encompasses a diverse range of businesses, from small-scale plantations to large-scale exporters, all playing a vital role in the sector’s growth and sustainability. The 56.5% tariff imposed by the US has made Sri Lankan rubber exports increasingly uncompetitive, threatening to reduce demand for Sri Lankan rubber in this key market.

In 2023 and 2024, Sri Lanka’s natural rubber exports to the US were valued at $ 1.2 million. In comparison, exports in 2022 amounted to $ 1.9 million, highlighting a notable contribution to the country’s foreign exchange earnings. However, the implementation of this tariff is expected to further erode the competitiveness of Sri Lankan rubber in the US market, leading to a continued decline in export revenue.

The consequences of this tariff extend beyond just the rubber sector. Rubber tappers, who form the backbone of the industry, face the prospect of losing their jobs as companies struggle to compete. Many tappers live in rural communities, where alternative employment opportunities are limited, and their families depend on the income generated from rubber tapping. A downturn in the industry could lead to an economic crisis in these areas, where the rubber trade has been a reliable source of income for decades.

The CRTA calls on all stakeholders to come together and ensure that Sri Lanka’s natural rubber industry can continue to thrive despite these challenges.