Impact of US export tariffs on Sri Lankan economy, particularly healthcare industry

IN recent years, global trade dynamics have experienced significant shifts, with the United States implementing stringent export tariffs on various countries, including Sri Lanka.

- SHAN HASAN

Introduction

These tariffs, particularly the 44% levy on approximately $ 3 billion worth of Sri Lankan exports, have profound implications for Sri Lanka's economy, with the healthcare industry being notably affected. This essay delves into the multifaceted impact of these US export tariffs on Sri Lanka, focusing on the healthcare sector, and explores potential strategies for mitigation and adaptation.

Overview of Sri Lanka's economic landscape

Sri Lanka, has long been recognised for its robust healthcare system and a diverse economy encompassing agriculture, manufacturing, and services. However, the country has faced economic challenges, including a significant financial crisis due to a dollar shortage three years ago. Despite these setbacks, Sri Lanka has shown resilience, achieving 2.5% economic growth last year, supported by a $ 2.9 billion bailout package from the International Monetary Fund (IMF).

The US export tariffs: A catalyst for economic strain

The recent imposition of a 44% tariff on Sri Lankan exports to the US marks a significant departure from previous trade policies that encouraged economic development through preferential trade terms. This tariff primarily targets Sri Lanka's apparel industry, which constitutes over 70% of its exports to the US The immediate consequences include potential job losses, reduced foreign exchange earnings, and a disruption in the supply chain.

Direct impact on the healthcare sector

The healthcare industry in Sri Lanka is intricately linked to the broader economy, and the repercussions of the US tariffs are multifaceted.