Economist warns of deepening economic vulnerabilities for SL amid US tariff policy

■ Economist Rehana Thowfeek cautions on 90-day tariff pause nearing its end, SL faces more than just potential decline in orders as it risks shock to already fragile economic recovery

- JANANI KANDARAMAGE

■ Believes solution doesn't lie solely in diplomacy with Washington, but in bold domestic transformation

■ Points to significant opportunity in India with 1.5 b people, booming middle class, calling it huge untapped market

■ Emphasises diversification and digitisation as Asia homes over 54% of global middle class, offering long-term promise for SL

■ Insists on strengthening SL's trade infrastructure, access to finance; integrating MSMEs into global value chains

■ Says digitisation remains a hurdle, while political will has often fallen short—but now the urgency is too great to ignore

SRI Lanka finds itself at a critical economic crossroads, with apparel exports—the country’s largest foreign exchange earner—caught in the cross-fire due to the imposition of a 44% reciprocal tariff, threatening to tip the precarious post-crisis economy into further policy inconsistency.

Economist Rehana Thowfeek, addressing a symposium on ‘US Tariffs, GSP+ Status and Strategic Policy Responses’ hosted by the National Movement for Social Justice (NMSJ) last week, issued a stark warning that Sri Lanka’s overdependence on the US market and its stagnant export strategy could spell serious trouble unless urgent structural reforms are made.