Adapting to global trade shifts: Strategic opportunities for Sri Lanka amid US tariff measures

SRI Lanka is currently navigating a complex international trade environment shaped by the imposition of new US tariffs on a range of imported goods.

- By Nirmala Paranavitana

These developments have intensified domestic discussions about the potential "softening" of trade terms as the country must simultaneously prepare for possible secondary tariffs on raw materials critical to key export sectors.The challenge for Sri Lanka lies not only in mitigating the immediate economic disruptions caused by these measures but also in leveraging the situation strategically to enhance long-term trade resilience and competitiveness.

Multifaceted strategic leveraging

Strategic leverage in this context requires a multifaceted approach. Strengthening domestic preparedness is essential, including robust institutional frameworks, effective regulatory systems, and enhanced fiscal governance. Clear articulation of trade objectives allows policymakers to prioritise sectors where Sri Lanka can maximise gains while minimising exposure to risks. Adaptive policy measures, guided by a realistic understanding of US policy behavior, judicious use of predictability, and robust domestic readiness, form the essential pillars for navigating future trade negotiations and international economic pressures effectively. By aligning domestic capabilities with global opportunities, Sri Lanka can position itself to respond proactively rather than reactively to shifts in the global trade landscape.

Effects of US tariffs