Trump's trade tariffs pose hidden threats to Sri Lankan economy

While U.S. President Donald Trump's trade war primarily targeted global economic heavyweights like China and the European Union, its ripple effects are being felt across smaller economies including Sri Lanka. Experts warn that Trump's protectionist trade policies, particularly the imposition of tariffs and the "America First" doctrine, could significantly impact Sri Lanka's export-driven growth model.

- BY M. I. D PERERA, Economist

Global Supply Chains Under Pressure

One of the most immediate threats stems from the disruption of global supply chains. Sri Lanka's key industries, including textiles, apparel, and electronics components, are heavily reliant on imported raw materials. The U.S. tariffs on Chinese and other foreign goods increased global production costs, leading to delays and price hikes that affect Sri Lankan exporters.

"These disruptions trickle down," says an economist at the Central Bank of Sri Lanka. "Higher input costs and reduced access to affordable materials can hurt the competitiveness of our exports."

Falling Global Demand Hits Exports