Future-proofing Sri Lanka against “Trump’s America Only Policy”

THE resurgence of Donald Trump in US politics has reignited global anxieties over economic unilateralism.

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His proposals—a universal 10% tariff on imports, escalated duties on Chinese goods, and dismantling multilateral trade frameworks—threaten to destabilise the rules-based order. Trump’s interest rightly is the USA. Therefore for Sri Lanka, a small, trade-dependent and tourism dependent nation navigating post-crisis recovery and debt restructuring, these geopolitical tremors demand urgent, strategic action. To withstand the potential eruption of “Trump policy changes,” Sri Lanka must adopt proactive measures — not reactive measures that blend structural reform, market agility, and diplomatic foresight.

1.Diversify export markets and investment sources

Sri Lanka’s overreliance on the US as a primary export destination—especially for apparel (which constitutes ~44% of exports)—exposes it to tariff shocks. While apparel may not be directly targeted, across-the-board tariffs could erode competitiveness. To mitigate this:

Accelerate trade diversification: Prioritise emerging markets in Asia (e.g., Vietnam, Indonesia), Africa (Rwanda, Kenya), and the Middle East (UAE, Saudi Arabia) through targeted trade delegations and bilateral agreements.

Leverage regional giants: Deepen economic ties with India (via the Economic and Technology Cooperation Agreement) and China (expanding BRI collaboration beyond infrastructure) to secure preferential access.