US trade war poses risks to Sri Lanka's creditworthiness, warns Fitch

Meanwhile, tensions between the world's two largest economies remain high

- BY SANATH NANAYAKKARE

Sri Lanka's already vulnerable finan-cial position could be further threat-ened by the ongoing US trade war, according to a recent analysis by Fitch Ratings.

The global ratings agency highlights that Sri Lanka, currently rated CCC+, is particularly susceptible to negative impacts if its export earnings are hit by the escalating tariffs.

Fitch Ratings, Hong Kong, in a press release issued on April 15, 2025, warned that increasing US tariffs would weigh on the credit metrics of many sovereigns in the Asia-Pacific (APAC) region. The report emphasised that APAC's high trade openness and reliance on US demand make it especially vulnerable to the fall-out from the trade war.

While the 10% tariffs imposed by the US on most countries are slightly below Fitch's earlier projections, the agency believes that Asian economic growth will slow as exports and export-oriented investments suffer from tariffs and increased uncertainty.