Sri Lanka's Garment Industry Faces Turbulence Amid U.S. Tariff Increases

Sri Lanka's garment sector is grappling with a 30% tariff imposed by the Trump administration, impacting its competitiveness against Vietnam and Bangladesh. The United States, a key market, imports significant apparel from Sri Lanka. Ongoing discussions aim to secure more favorable trade terms to mitigate economic impacts.


Devdiscourse News Desk | Updated: 10-07-2025 15:09 IST | Created: 10-07-2025 15:09 IST
Sri Lanka's Garment Industry Faces Turbulence Amid U.S. Tariff Increases
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The Sri Lankan garment industry is under duress following a 30% tariff imposed by the U.S., a critical export destination accounting for 40% of its apparel exports. The imposed rate surpasses that of Vietnam, a major competitor, leading to concerns about losing market share.

President Donald Trump's recent letter to Sri Lanka's leader underscores the challenge, placing Sri Lanka's apparel exports in a competitive bind against countries like Vietnam and Bangladesh, with the latter facing a slightly higher tariff rate. The Sri Lankan government remains in talks with Washington to negotiate a reduction.

Applications are closely monitoring the situation as India's potential impact looms. The country's Central Bank Governor noted it's premature to assess the economic repercussions, despite assurances from the IMF of a positive outlook. The strategic focus remains on diplomacy to offset adverse outcomes.

(With inputs from agencies.)

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