Distress is in store for Sri Lanka’s garments sector if the island nation is unable to clinch a tariff lower than the 30% figure U.S. President Donald Trump has clamped on imports from Colombo, a top industry body warned on Thursday.

The United States takes about 40% of apparel exports, helping to pull in $1.9 billion last year and make the industry Sri Lanka’s third largest earner of foreign exchange, employing 300,000 people, most of them women.

“If this is the end number, Sri Lanka is in trouble because our competitors, such as Vietnam, have received lower tariffs,” Yohan Lawrence, of the Joint Apparel Associations Forum (JAAF) representing the largest apparel companies, told Reuters.

“But we are hopeful we can continue discussions.”

In a letter on Wednesday, Trump notified President Anura Kumara Dissanayake of the 30% tariff from August 1, a rate well above the 20% levy faced by competitor Vietnam.

The U.S. tariff on neighbouring Bangladesh, another major South Asian garment exporter, was set at 35%, though the levy on India, also a big U.S. supplier, has not yet been unveiled.

The Sri Lankan government did not immediately respond to a request for comment but called a news briefing later in the day, to be attended by central bank governor Nanadalal Weerasinghe as well as trade and finance officials.

Sri Lanka’s apparel exports to the United States in the first five months of 2025 stood at $747 million, while its total apparel exports last year were worth $4.8 billion, JAAF data shows.

Last week, the International Monetary Fund (IMF) said Sri Lanka’s economic outlook remains positive, despite significant risks to macroeconomic and social stability from global trade policy uncertainties.

When he initially unveiled his tariffs on April 2, Trump had threatened a levy of 44% on about $3 billion of the Indian Ocean nation’s exports.

Source: Reuters
--Agencies