Opposition MP Ravi Karunanayake raised concerns in Parliament on Tuesday (18) about the potential impact of US President Donald Trump’s trade policies on Sri Lanka’s key export sectors, such as textiles, apparel, rubber, coconut, and plastics. With the US set to implement new trade policies, Karunanayake questioned whether the government was prepared to step up its negotiation efforts, particularly given the country’s fragile economic situation.

Minister of Labour and Deputy Minister of Economic Development, Dr. Anil Jayantha Fernando, responded by assuring Parliament that Sri Lanka had already initiated steps to minimise the adverse effects of Trump’s trade policy. According to Dr. Fernando, Sri Lanka’s Ambassador in Washington had engaged in negotiations with US authorities.

The Labour Minister emphasized the importance of the strong bilateral ties between Sri Lanka and the U.S. and expressed hope for a successful outcome through continued engagement.

Karunanayake, however, urged the government to take more proactive steps, especially as Sri Lanka is still recovering from its economic crisis. He suggested that the country’s negotiation skills could be further strengthened to secure special accommodations from the US government under President Trump’s policies.

“We must focus on avoiding the imposition of tariffs, especially given the delicate state of our economy. Can we not step up our negotiation skills and seek a special arrangement with President Trump and the US government?” Karunanayake asked, stressing the need for a diplomatic solution to safeguard Sri Lanka’s exports.

He raised a number of questions regarding the potential effects of the US trade policies on Sri Lanka’s textile and apparel exports, which are vital to the country’s economic growth. With a target of USD 8-10 billion in export revenue by 2030, a significant portion of Sri Lanka’s exports are directed toward the US, a major trading partner. However, Karunanayake expressed concern that President Trump’s “de-globalization” approach, which uses tariffs as a strategic tool to address trade deficits, could hurt Sri Lanka’s competitiveness in the US market.

Karunanayake also asked the government if it had assessed the impact of potential tariff hikes by the US on Sri Lankan exports and what steps had been taken to maintain and expand market access for Sri Lankan goods under existing trade arrangements, such as the Generalized System of Preferences (GSP).

He further inquired whether the government had explored foreign direct investment (FDI) opportunities or sought trade agreements with other countries to diversify export markets and reduce reliance on the US.

The opposition MP also posed several other questions aimed at understanding the government’s strategy for managing the evolving global trade environment and supporting Sri Lanka’s key industries.

In light of the looming challenges, Karunanayake suggested that Sri Lanka could make its textile exports more competitive in the US market by focusing on lowering production costs, potentially mitigating the effects of tariffs. He also called on the government to explore ways to facilitate strategic adjustments to Sri Lanka’s export strategies through policy interventions and support programmes.

With the uncertainty surrounding US trade policies, Karunanayake’s remarks highlighted the need for a comprehensive and proactive approach to protect Sri Lanka’s economic interests while fostering stronger trade relations with the US and other global markets.

By Saman Indrajith