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US election outcomes and trade policy changes: What it means for Sri Lanka

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By Dr Asanka Wijesinghe

Now that the United States (US) election has concluded, what direction will the US’s trade policy be headed? This is one of the burning questions that many of its trading partners are asking in the aftermath of the presidential election.

A costly trade war was the outcome of the tariff hikes in 2018 – under the first term of President Trump – which was followed by retaliatory tariffs from the US’s trade partners.

Elected for a second term, he is once again proposing significant tariff increases as trade policy measures. These potential hanges in US tariff policies will have a direct impact on Sri Lanka’s export industries. The US is the top individual export destination of Sri Lanka, accounting for 23.6% of its total exports (Figure 1).Market share of export destinations of Sri Lanka: 2023

The economic justification for a global tariff on imports and its efficacy in achieving the expected results – such as the reshoring of manufacturing employment to the US and price reduction – remains uncertain. This article mainly focuses on the adverse impacts of a tariff increase on Sri Lanka’s exports to the US.

Future of US Trade Policy

The consumer subsidy-based industrial policy, introduced under the Inflation Reduction Act by the incumbent US administration is expected to continue.

However, the effect of a tariff is more direct than a consumer subsidy. On the campaign trail, the US president-elect proposed 10 percentage points on US imports. This is understood as an additional 10% tariff, rather than a new minimum tariff. It implies that there will be an additional 10 percentage point tariff on the existing average tariff rate of 12.6% on the wearing apparel sector, for instance, if the proposed tariff is implemented

The precise rate of the tariff increase remains ambiguous, as a proposal for a 20% additional tariff was suggested later instead of the 10%. In addition, a 60% to 100% tariff is proposed on imports from China. Also, a more complex, country-specific retaliatory tariff schedule has been proposed to align US tariffs with the rates that the US products face in each country.

Effect of a US Global Tariff on

Sri Lankan Exports

An increase in the US tariffs is likely to reduce consumer demand for imported goods. Additionally, an economic downturn in the European Union (EU), triggered by a trade conflict between the US and its trading partners, could further suppress demand for Sri Lanka’s exports.

If an additional 20% tariff is applied on top of the existing average tariffs for all countries, estimates show that Sri Lanka’s exports to the US are expected to suffer a significant negative impact (Figure 2). For example, wearing apparel, Sri Lanka’s major export sector will experience a loss of USD 187.9 Million. As a percentage, this is a contraction of 8.1% from the base year, 2022.

According to the estimates, the proposed tariffs will severely impact Sri Lanka’s exports of rubber and plastic products, as well as other manufactured products like Christmas decorations, brooms and brushes (Figure 2).

As a percentage, about 90% of export loss can be expected in the chemical products sector which includes activated carbon, and essential oil.

If the US imposes a 60% to 100% tariff on imports from China, relatively high pricing on Chinese products could benefit countries like Sri Lanka from trade diversion.

However, the overall rise in import prices resulting from a broader trade war will drastically reduce the US demand for imports, limiting the gains from this trade diversion.

The US trade partners will retaliate with tariffs, similar to the China-US trade war in 2018. The proposed tariff is estimated to cost an average US household more than USD 2,600 a year, once retaliatory tariffs are factored into the analysis. Additionally, the slowdown of US growth, as a possible consequence of a tariff war, will further reduce the country’s import demand.

The spillover effects of tariff wars will also negatively affect Sri Lanka as the EU countries are expected to experience a substantial economic setback. It is estimated that the EU may see its GDP erode by 1.5%, or about Euro 260 billion.

An economic contraction in the EU will reduce the EU imports from Sri Lanka significantly. Thus, the estimated effects in this article can be considered only as the first-round effects.

Campaign Rhetoric or a Credible Threat? The ikelihood of Tariff Hikes and

Sri Lanka’s Options

A blanket tariff increase and an intense trade war between China and the US will drive up the domestic prices in the US, fuelling fear of inflationary pressure. Accordingly, it is unlikely that the proposed tariffs will be fully implemented given the significant impact of inflation on elections in the US.

As the protectionist measures target the US’s manufacturing sector, sub-sectors like light household equipment, decorations, metal products, and machinery may become more vulnerable to future tariff shocks.

These non-traditional exports of Sri Lanka play a major role in export diversification and are generally more complex and technologically sophisticated.

As a small exporting economy, Sri Lanka is susceptible to external factors that are beyond its control. Additionally, Sri Lanka’s limited role as a purchaser of US commodities limits its ability to negotiate lower tariffs. As a result, the toolbox of responses to future US tariff shocks contains only marginal adjustments.

These may include offering import tariff relief for raw materials and providing production subsidies, such as electricity subsidies, to support domestic producers in maintaining their competitiveness. A consultation with the producers in this regard will enable the government to determine the most effective policy measures.

In the medium term, given the global rise of protectionist and industrial policy measures in major export destinations, Sri Lanka will need to maintain preferential tariffs in other regions like the EU.

It will be vital for Sri Lanka to maintain the GSP+ preference and renewed attempts for increased cumulation to increase the GSP+ utilisation will benefit Sri Lanka.

As the expected high tariffs and the technical barriers in the US and the EU are probable in the future, Sri Lanka should maintain the trade policy reforms aiming to join regional trading blocs like the Regional Comprehensive Economic Partnership (RCEP).

Dr Asanka Wijesinghe is a Research Fellow at IPS with research interests in macroeconomic policy, international trade, labour and health economics.

He holds a BSc in Agricultural Technology and Management from the University of Peradeniya, an MS in Agribusiness and Applied Economics from North Dakota State University, and an MS and PhD in Agricultural, Environmental and Development Economics from The Ohio State University.

(Talk with Asanka – asanka@ips.lk)



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Harnessing nature’s wisdom: Experts highlight “Resist–Align” path to resilience

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As Sri Lanka confronts mounting environmental and economic pressures, a timely national conversation on resilience has underscored the urgent need to rethink how societies respond to change—by balancing resistance with alignment to nature.

The inaugural Nature Talks Webinar Series, titled “Nature’s Secrets for Building Resilience in a Changing World,” took place on Wednesday night, bringing together leading environmental thinkers who argued that resilience is no longer optional, but essential in navigating climate and ecological uncertainty.

Organised collaboratively by the International Centre for Biological Studies (ICBS), GAP HQ, and the Biomimicry Research Centre, the session aimed to bridge science, policy, and innovation, while drawing practical lessons from nature.

Leading the discussion, Professor Sarath Kotagama of the University of Colombo emphasised that resilience must be understood as a combination of resistance and alignment.

“Resilience is about resisting where necessary, but also forming alliances with change,” he said. “We are not saying we can stop everything. The real question is—can we adjust to live with it?”

He urged societies to reflect on their ability not only to prevent or resist environmental change, but also to adapt intelligently to it. Referring to global developments such as Artemis II, Kotagama noted that humanity is increasingly being reminded of how rapidly conditions are shifting on Earth.

Drawing lessons from the COVID-19 pandemic, Professor Kotagama outlined several insights that have reshaped thinking on resilience.

“One of the most important lessons was the role of microbes,” he said. “We always focused on large animals in biodiversity, but COVID showed us that invisible organisms can have a massive impact on the planet.”

He explained that while conservation has traditionally prioritised charismatic species such as elephants and birds, microorganisms—often overlooked—are equally critical to ecological balance.

Professor Kotagama also challenged assumptions about nature. “Nature is not always kind or caring. Under certain conditions, it can be harsh, and humans don’t necessarily feel affection for all forms of life—especially microbes,” he said.

At the same time, he stressed the decisive role of science. “If not for science, we would not have survived as we did,” he noted, pointing to the rapid development of vaccines despite global norms that typically require years of testing.

He further highlighted the importance of governance. “We may not always like governments, but during COVID, governments mattered. Without coordinated action, the outcome would have been far worse,” he said.

Professor Kotagama added that the pandemic exposed vulnerabilities in the global economic system, with industries such as tourism collapsing almost overnight due to what he described as “an invisible microbe.”

“It showed clearly that systems we thought were stable can be disrupted instantly,” he said, warning that unsustainable development models—particularly in tourism—must be reconsidered.

Meanwhile, Professor Sevandi Jayakody of Wayamba University of Sri Lanka highlighted biomimicry as a key pathway to resilience.

“The biggest answer to resilience is biomimicry,” Professor Jayakody said. “Nature already holds solutions—we just need to understand and apply them.”

She explained that biomimicry can operate at the level of form, process, or systems, and cited mangrove restoration as a practical example. Attempts to artificially recreate ecosystems often fall short unless they follow natural patterns such as tidal flows and species interactions.

“In restoring degraded mangroves, we learned that forcing systems does not work. When we followed natural contours and introduced resilient ‘nurse’ species, the ecosystem began to recover on its own,” she said.

Professor Jayakody emphasised that resilience must be embedded within environmental systems rather than imposed externally. “Resilience is a function of the environment we live in. If we ignore that, our interventions will fail,” she said.

She also cautioned against expecting rapid results. “Nature is slow. Humans are in a hurry,” Professor Jayakody noted, pointing to long-term data showing that even measurable ecological changes—such as seasonal shifts—can occur gradually over decades.

“Change is inevitable, but it is not always sudden. We need long-term data, patience, and the wisdom to interpret it correctly,” she added.

Moderating the session, Imaduwa Priyadarshana brought a practical perspective on sustainable design and adaptation, highlighting how nature-based thinking can inform urban planning and infrastructure.

With Sri Lanka grappling with climate variability, coastal degradation, and energy challenges, the experts stressed that such knowledge-sharing platforms are increasingly vital. The discussion aligned with a growing global shift towards nature-based solutions—learning from ecosystems that have evolved resilience over millennia.

By Ifham Nizam

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Uber Eats continues Sri Lankan expansion now in Nuwara Eliya

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Uber Eats is now live in Nuwara Eliya, making it easier for locals and tourists to enjoy their favourite meals – from a hot plate of kottu on a chilly evening to a comforting rice and curry spread or crispy egg hoppers – delivered right to their doorstep.

Known for its cool climate, old-world charm, and rolling tea estates, Nuwara Eliya sees a surge of Sri Lankan and international visitors during the April holiday season. But as temperatures drop in the evenings, food options have traditionally been limited, with many outlets closing early.

With Uber Eats now available, consumers can discover and order from a growing range of local restaurants and neighbourhood favourites – without stepping out. The platform also extends access to meals into the late evening, making it easier to find food even after most outlets have closed. In Nuwara Eliya, specially designed temperature-controlled insulated bags will help ensure meals are delivered hot. Consumers can choose from a wide variety of cuisines including Sri Lankan, Indian, Chinese, Thai, and Arabic or order from global brands such as KFC, Pizza Hut, and Domino’s.

The launch supports the local community by enabling restaurants to reach more customers across the city, while creating flexible earning opportunities for delivery partners, especially during the busy holiday season.

Varun Wijewardane, Country Manager – Delivery, Uber Sri Lanka, said: “Nuwara Eliya is one of Sri Lanka’s most loved destinations, especially during the April season. With Uber Eats now live, we’re making it easier to enjoy great food more conveniently – from everyday favourites to late evening short eats while also supporting local restaurants and creating earning opportunities within the community. This comes on the back of an aggressive expansion of our services across Sri Lanka – providing our consumers with convenient access to local favourites and unlocking earning opportunities for more Sri Lankan communities.”

Entry in Nuwara Eliya builds on expansion from last year across 6 districts including Hikkaduwa, Ambalangoda, Chilaw, Wennappuwa, and Puttalam, Jaffna, Gampola, Matale, Matara, Weligama, Mirissa, and Anuradhapura – further strengthening Uber Eats’ position as the country’s go-to delivery platform.

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Five consecutive years as a Company with Great Managers

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Union Assurance PLC is licensed by the Insurance Regulatory Commission of Sri Lanka (IRCSL).

Union Assurance, Sri Lanka’s longest-standing private Life Insurer, was honoured as a ‘Company with Great Managers’ for fifth consecutive year at the CLA Great Managers Awards 2025, held at Cinnamon Grand Colombo. Presented annually by the Colombo Leadership Academy & CLA Coaching Inc, the award affirms that Union Assurance’s approach to leadership excellence is not episodic, but deeply embedded across the Company.

The CLA Great Managers Awards programme, powered by Colombo Leadership Academy & CLA Coaching Inc. in strategic partnership with People Business, The Culture Factor Group – Hofstede & Onehub, is regarded as the international benchmark for assessing managerial and leadership effectiveness in Sri Lanka. Using the scientifically grounded D-ACTI 5X meta-analysis framework, the programme evaluates managers across five leadership pillars: Driving Results & Execution Excellence, Aligning Organizational Vision, Coaching & Developing Others for Growth, Building Team Effectiveness & Collaboration & Leadership Integrality & Holistic Approach.

Reflecting the depth and diversity of managerial capability within the organisation, five Union Assurance leaders were individually recognised across distinct award categories this year. Sashika Perera, Senior Manager – Statutory Reporting & Taxation, and Ishanthi Umedha, Head of Governance & Valuation, were recognised for ‘Demonstration of Well-Rounded Performance and Managerial Effectiveness.

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