Crosshairs: TRUMP’S “LIBERATION DAY” TARIFFS CALL FOR NATIONAL UNITY

When U.S. President Donald Trump announced his sweeping “Liberation Day” tariffs, the world economy braced for seismic aftershocks.

- By KKS PERERA

In a bold and controversial return to economic nationalism, Trump invoked the International Emergency Economic Powers Act of 1977 to impose a baseline 10% duty on all imports, with significantly higher tariffs on nations with which the U.S. maintains the largest trade imbalances. Sri Lanka, already reeling from its 2022 economic collapse, has been hit with a staggering 44% tariff on its exports to the U.S—one of the highest rates announced—posing a near-existential threat to its export economy, especially the vital apparel industry.

A Global Shockwave with Local Fallout

The policy’s global repercussions were immediate: stock markets plunged, currencies wavered, and analysts warned of a possible worldwide recession. JP Morgan placed the likelihood of a global economic downturn at 60% by year’s end. Japan’s Nikkei index suffered a sharp drop, underscoring the global market’s vulnerability to American policy shifts. The United States, long the standard-bearer of free trade, had abruptly pivoted to protectionism.

For Sri Lanka, the fallout has been devastatingly direct. About 23% of the island nation’s exports are US.-bound, with 55% of that figure generated by the apparel sector alone. That industry supports the livelihoods of roughly 710,000 people. Now, with an almost punitive 44% tariff in place, factories face closure, unemployment is expected to rise sharply, and the already fragile economy risks further contraction.