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Canada holds its own as Americans sour on Trump

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Jubilant Carnay after Canadian elections

On Monday, April 28, Canadians gave the Liberal Party its fourth successive mandate, albeit as another Minority Government but much stronger than in the last two elections, and, more importantly, with a different Prime Minister. Justin Trudeau who had been Prime Minister from 2015 was forced to resign in January 2025 on account of his perceived electoral unpopularity. Trudeau was succeeded by Marc Carney, 60 year old former Governor of the Bank of Canada and later the Bank of England, who dramatically revived the falling fortunes of the Liberal Party and secured its fourth mandate in 10 years.

The Liberal Party and Prime Minister Mark Carney owe their good fortunes to the presidential madness that is going on south of the border, in the United States of America. With his mercurial obsession over tariff’s and recurrent musings about making Canada America’s 51st State, President Trump painted the backdrop to the Canadian election. Trump’s antics did not go down well with the Canadian public and in a rare burst of patriotism the people of Canada overarched their diversities of geography, language, culture, religion and ethnicity, and rallied round the Maple Leaf national flag with utmost determination to stick it to Trump and other Ugly Americans of his ilk.

People and businesses in Canada shunned American products, stopped travelling to US holiday destinations and even took to booing the US national anthem at sporting events involving US and Canadian teams. The threat of economic pain due to a tariff war is real, but Canadians are daring to suffer pain rather than become a part of the US. And Justin Trudeau showed his best leadership in his last days as Prime Minister. Combining diplomatic skill and splendid teamwork with eloquent defiance, Trudeau succeeded in forcing Trump into what has since become Trump’s modus operandi in implementing his idiosyncratic tariff policy: tariff, one day; pause, the next day; and uncertainty, extended indefinitely.

100 Days of Disaster

What he began with Canada and Mexico, Trump has since writ large upon the whole world. His second term is already a term of chaos not only for America but also for the whole world economy. The US economy is officially in first quarter contraction. Another four months, it could be a man made recession of what was in January an economy that was humming sound and was easily the best performing one in the world. It’s only 100 days of the second term, and what is left of it is looming as eternity. “Only 1,361 Days to Go,” is the cover page heading of the latest issue of the Economist. That sums up America’s current state of affairs and their global spillover effects.

Americans are beginning to sour on Trump but there is no way for them to channel their frustrations and anger to force an immediate executive retreat. Trump has reduced the Republican Party to be his personal poodle and with Republics holding slender majorities in both the Congress and the Senate, the Legislative Branch of the US is now wholly beholden its Executive. The traditional wait is for the midterm Congress elections in two years. But Trump has no respect for traditions and conventions, and it would be two years too much before a Democratic majority in the two houses could bestir the Congress to check and balance the runway president.

The Judicial Branch is now playing catch up after the Supreme Court had given Trump near absolute immunity and enabled his second coming. The lower courts are applying the law as they should and stymieing Trump’s palpably illegal orders on everything from deporting immigrants, to downsizing government, and gutting the country’s university system. The tariff cases are slowly making their way to courts and they will add more confusion to the running of the economy before some kind of sanity is restored. Overall, by upending a system of government that has been constitutionally evolving over 200 years, Trump is providing a negatively sobering demonstration that no system is foolproof if a capable fool is elected to take over the reins of government.

Fortunately for the world, other governments and polities have been quick in drawing the right lessons from the demonstration effects of Trump on their American cousins. Trump’s excesses have had a dampening effect on right wing populism in other countries. The Canadian elections are one such demonstration. Another is expected in Australia where national elections are scheduled for Saturday, May 3. In Europe, right wing populist parties are scaling down their rhetoric to avoid facing local backlashes to Trump’s American excesses.

No populist leader anywhere wants to go where Trump is blindly heading, and no one is mad enough like him to think that imposing tariffs is the way to grow a national economy. In Hungary, its strongman Viktor Orbán after securing super majorities in four elections since 2010, is facing the real possibility of defeat in the national elections next year. Orban is regressively anti-Eu while 86% of Hungarians want to strengthen their EU ties, and they are naturally getting tired of Orban’s smearing of the EU just like all Europeans are getting tired of Trump’s and his VP Vance’s anti-European rhetoric.

Canada Holds its Own

Canada, despite its proximity to the US, has never been a haven for Trump’s right wing populism. Yet there have always been and continue to be pockets of support for Trumpism in Canada, and they have found their sanctuary within the Conservative Party of Canada and behind its leader Pierre Poilievre, a 45-year old career politician who entered parliament in 2005 at the age of 25 and became Leader of the Conservative Party and Leader of the Opposition 18 years later, in 2023.

Clever and articulate with an ability to spin rhyming simplistic slogans, Poilievre cultivated his political base by feeding it on a diet of vitriolic and vulgar personal attacks and advertisements denigrating then Prime Minister Justin Trudeau. Poilievre identified himself with the 2022 truck convoy protest that stormed Ottawa, cheered on by MAGA America, and he came to be seen as Canada’s Trump-lite (not unlike Peter Dutton, the Leader of the Opposition in Australia). Nonetheless, Poilievre’s attacks on Trudeau worked in the post-Covid climate of economic hardships and Trudeau’s popularity sank to the point that his own MP’s started calling for his resignation.

Alas for Poilievre, Trudeau’s resignation in January took away the one political foil or bogeyman on whom he had built his whole campaign. In addition, while his attacks on Trudeau diminished Trudeau’s popularity, it did not help enhance Mr. Poilievre’s image among Canadians in general. In fact, he was quite unpopular outside his base of devotees. More people viewed him unfavourably than those who viewed him favourably. Outside his base, he became a drag on his party. He would even go down to defeat in his own electorate and lose his seat in parliament that he had held for 20 years.

Mr. Poilievre’s troubles began with the emergence of Mark Carney as the new Liberal Leader and Prime Minister – looking calm, competent and carrying the ideal resume of experience in dealing with the 2008 financial crisis as Governor of the Bank of Canada, and calming market nerves after the 2016 Brexit referendum as Governor of the Bank of England. Carnie, who had never been in formal politics before, seemed the perfect man to be Prime Minister to weather the economic uncertainties that President Trump was spewing from Washington. Almost overnight Liberal fortunes shot up and after resigning themselves to face a crushing defeat with Trudeau at the helm, Liberals were suddenly facing real prospects of forming a majority after two terms of minority government.

In the end, thanks to the quirky genius of the electorate, Liberals ended with 168 seats with 43.7% of the vote, and four seats short of a majority in the 343 seat national parliament, while the Conservative Party garnered 144 seats with 41.3% vote share. Both parties gained seats from their last election tallies, 15 new seats for Liberals and 16 for Tories, and, unusual in recent elections, the two parties garnered 85% of the total vote. The increases came at the expense of the two smaller but significant parties, the left leaning New Democratic Party (reduced from 24 to seven seats); and the Bloc Québécois (reduced from 45 to 23 seats) that contests only in the French majority Province of Quebec. The Green Party that had two MPs lost one of them in the election.

In the last parliament, the New Democrats gave parliamentary support to the minority Trudeau government in return for launching three significant social welfare initiatives – a national childcare program, an income-based universal dental care program, and a pharmacare program to subsidize the cost of prescription drugs. These are in addition to the system of universal public health insurance for hospitals and physician services that has been in place from 1966, thanks again to the programmatic insistence of the New Democratic Party (NDP).

But the NDP could not reap any electoral reward for its progressive conscience and even its leader Jagmeet Singh, a Sikh Canadian, lost his seat in the election. The misfortune of the NDP and the Bloc Québécois came about because even their supporters like many other Canadians wanted to entrust Mark Carney, and not Pierre Poilievre, with the responsibility to protect the Canadian economy from the reckless onslaughts of Donald Trump.

Yet, despite initial indications of a majority government, the Liberals fell agonizingly short of the target by a mere four seats. The Tories, while totally deprived of what seemed in January to be the chance of a landslide victory, managed to stave off a Liberal sweep under Mark Carney. The answers to these paradoxes are manifold and are part of the of reasonably positive functioning of Canadian federalism. The system enables political energies and conflicts to be dispersed at multiple levels of government and spatial jurisdictions, and to be addressed with minimal antagonism between contending forces. The proximity to the US helps inasmuch as it provides a demonstration of the American pitfalls that others should avoid.

by Rajan Philips



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A visa for bringing in expertise and expanding tourism

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In this article, I introduce an idea which is simple to implement but is powerful and helps with building technical skills, strengthening the country brand and creating international opportunities for Sri Lankans. Furthermore, it can diversify and extend the country’s tourism revenue streams.

The simple idea is to introduce a hassle-free visa for Internships, Volunteering, Expert Exchange Programs and Short-term Studies. For brevity, let me call it a Knowledge Transfer Visa or KTV. There are three important clarifications to make up-front. Firstly, this visa is not for those seeking paid employment in Sri Lanka. Secondly, the local partner needs to ensure that if any local permits or permissions are applicable, these are in place and cover any KTV holders. Thirdly, it is not a resident’s visa and tourist rates will have to be paid by KTV holders for their sightseeing.

It is also important to spell out up-front a critical requirement for success. This is that an applicant from a country who is entitled to obtain an online tourist visa quickly and easily should be able to obtain a KTV with the same ease and convenience. It would be reasonable for the Department of Immigration to have an additional information box in the visa application to ask for the name and contact details of the local partner (corporate or individual). But it should not be the role of the visa issuing officer in a Sri Lankan foreign mission or the Department of Immigration to examine paperwork to assess the credentials of the visitor and the local partner. This should be left to the applicant and local partner to assess each other. By analogy, a tourist is not asked to demonstrate that the hotel they have booked into is validly registered as a tourism business. Nor does the visa issuing process ask the hotel if they have vetted the tourist’s ability to pay. If the KTV is kept as simple as an online tourist visa, it will succeed, otherwise it will fail to deliver the potential benefits.

A reader may ask why this sort of visa is needed. The answer is that Sri Lanka is well positioned to benefit from activities covered in a knowledge transfer visa. However, such visits will only materialise if foreign nationals are reassured that they can arrive for such purposes with a visa where the purpose of their visit is explicitly recognised and they are confident that their visit is welcomed. Visitors on a KTV will bring in hard currency revenues in much the same way as ordinary tourists but importantly lead to other benefits such as the import of expertise, building international networks for local corporates and individuals and being potential repeat visitors. Let me explain by running through the various strands.

Internships

With the first strand, Internships, there is an overt intention that people want to work in a very structured manner and obtain useful work experience to help obtain paid employment back in their home country. Sri Lanka for various reasons, wishes to have tight controls over foreign workers and to limit foreign nationals on work visas. It is important to point out that facilitating internships need not conflict with this thinking. Incoming foreign interns are different to full-time foreign workers and caters to a younger demographic looking for a short period of work experience. If Sri Lanka restricts foreign internships to unpaid internships, this will limit the candidate pool to those interns who have parental financial support. Nevertheless, this is still a start and better than not opening the door at all.

In many sectors, Sri Lanka can offer meaningful summer internships of up to 3 months or longer. Two obvious examples are Tourism and Information Technology (IT). Sri Lankan companies cannot run viable business models by relying on a supply of foreign interns. Therefore, foreign interns do not in any way threaten the prospects for locals for employment. On the contrary, foreign interns from developed economies can benefit locals working with them in various ways. These could include improving language skills, and locals gaining exposure to skills such as time-management and project planning. Internships can also be used for foreign students to engage in undergraduate and postgraduate university projects with local academics.

To explain how foreign interns can be very useful, let me construct an example. It is a fact that Sri Lankan companies are writing the software for some of the most technologically advanced companies in the world. Imagine Sri Lankan IT companies actively pitch this to foreign universities in advanced economies and foreign undergraduates take up internships in Sri Lanka. Not only do they gain work experience of an equivalent standard to working in London or New York, but they will have a more exciting time in a tropical country. When they graduate, they will take up jobs in London, New York or wherever. When their employers are looking to outsource work, they may recommend the companies they worked with in Sri Lanka. Some of these foreign interns may even start their own companies in the future and look to outsource work to the Sri Lankan companies they worked with. If the new start-ups do well, there may be frequent business visits. When their former interns start families, they will visit Sri Lanka on visits which combine business meetings with a family holiday. Their children in turn will grow up with Sri Lanka being a place that was a regular holiday destination and, in the future, bring their own children on holiday. Internships in Sri Lanka to foreign students can grow future business revenues and also create a multi-generation chain of tourists.

Some foreign interns can also work in a three-way collaboration between their university, a local university and a private sector company. Take for example, a hotel that has placed camera traps on its property to study wildlife. If they do it on their own, it may simply be for marketing the hotel. If they can partner with a local academic or conservation NGO, it could be elevated into a formal study, perhaps even a long-term study. For both the local academic and the hotel, it would be useful if any work they do is part of a long-term study with a foreign university. International collaborations like this are also more useful to the hotel in their efforts for international publicity. For the local academic or conservation NGO, the international collaboration could also open opportunities for funding and recognition and invitations to present in international conferences. A win for all.

If Sri Lanka companies open up to foreign interns, it may result in them realising the value of well-structured internship programs and the dialogue with overseas interns and their academic supervisors may lead to good internship programs being set up for both local and foreign applicants. This can only help young resident Sri Lankans who at present are frustrated by the paucity of structured internship programs even amongst Sri Lanka’s leading companies.

Before I continue to the next two strands, it is useful to reiterate why a knowledge transfer visa is important. The above-mentioned benefits can only arise if potential foreign interns and volunteers have a mechanism of a special visa to reassure them that the purpose of their visit is properly disclosed and that their activity in Sri Lanka is welcomed and completely above-board within the stated purpose of the visa.

The same will apply, with voluntourism, which is a form of commercial tourism activity. Overseas companies that have a business model of arranging voluntourism abroad are more likely to add Sri Lanka as a destination if a KTV existed.

Volunteering

The second strand is Volunteering and here I define it narrowly to cases where a volunteer is not volunteering to build out their CV to help them gain paid employment in their home country. If they are doing so, it is covered under the Internship category. Under this definition, volunteers are people who fall into two broad categories. They may be volunteering for recreational purposes, coupled with wanting to do something that is societally useful. Or they may be people who are retired and on a comfortable retirement income who now have time and money to give something back to society. For example, a person in a highly paid job may come and volunteer for two weeks on a science (e.g. biodiversity surveys) or an arts project (e.g. cataloguing temple art). They may do this because they enjoy doing something different from their day job which is related to their personal interests and societally useful. This type of volunteering has become a significant form of tourism, known as voluntourism.

For the second type of volunteering an example would be a retired wildlife reserve manager from overseas who is happy to work for free with a Sri Lankan hotel or game lodge to train guides and provide practical help in rewilding the grounds of the property. They may enjoy mentoring and want to share their experience with others who are happy to learn from them. To take another example, it could be a retired museum curator who is happy to volunteer at a government museum to train local staff and inject fresh thinking into how exhibitions are curated.

The host country receives free expertise and valuable time from such volunteers. The volunteers are also paying tourists.

In G20 countries, volunteering is highly organised and has resulted in businesses that provide on-line platforms to match volunteers with recipient organisations. Sri Lanka can benefit from making it easy for people to volunteer and to come over, whether it is to paint hospital wards, help in beach clean-ups, or to help at a literary, music or cultural festival or to train local wildlife guides. Many volunteers will also look to add on a holiday extension to their volunteering stay. It is not just free people-hours of work and spending as foreign visitors: Carefully chosen good volunteers also bring in ideas, know-how, enthusiasm and energy.

Expert Exchange

The third strand in the knowledge transfer visa is for Expert Exchange. This is for people who are established in their discipline and looking to diversify their experience and build an international network by engaging in short term unpaid assignments overseas. For example, let’s assume a senior academic would like to spend a month working with local counterparts. Perhaps it is someone from a Management Science faculty who is interested in South Asian trade and wishes to work with local counterparts in a Sri Lankan professional institution or the Management Science faculty of a university. Or, perhaps it is an academic with an interest in contemporary Asian art. In such situations, a mutually useful arrangement between the foreign visitor and any local counterparts would be for the visitor to be provided a desk and some working space in the local faculty. Perhaps the visiting academic or professional can even undertake to give a certain number of lectures to Sri Lankan students. Relationships established in this way could lead to reciprocal invitations for Sri Lankan academics to attend foreign conferences and workshops and possibly help with Sri Lankan students receiving guidance and support with doing a PhD overseas. The visiting academic or expert is not being paid by the local partners in Sri Lanka and will continue to be on the payroll of their employer in their home country. Again, such visitors need to be reassured that what they are doing is deemed above -board and welcomed. They would not wish to come to Sri Lanka on a standard tourist visa for an engagement of this kind.

Short-term Study

The final strand of the knowledge transfer visa is for Short-term Study. Sri Lanka already has the skilled teachers and education infrastructure to offer undergraduate degrees from several foreign universities. It also runs accredited courses for professional qualifications from organisations that are based in G20 countries, whether it is in Accountancy or Marketing or IT. This capability can be expanded to provide ‘summer schools’ where foreign students arrive for a combination of classroom and field teaching. Local educational institutions can use their business initiative to develop curricula in consultation with foreign universities to meet the coursework credit requirements. If it is simple and easy to obtain a visa to attend such a course in Sri Lanka, this becomes a tempting offer for foreign students. In areas spanning from medicine, tourism, and the biological sciences, Sri Lanka can become an exciting destination for classroom and field work.

Conclusion

The results won’t be seen immediately as it takes years for local counterparts and foreign counterparts to respond and adapt to the benefits of such a visa. But slowly and steadily, we will see benefits accruing to the country. We also need to keep in mind that with anything that involves people, sometimes things don’t work out. A few foreign visitors or the Sri Lankan partners may not fulfil their obligations properly. We should not allow misguided fears of a few bad apples to block the massive potential for Sri Lanka to benefit from a simple but powerful idea that is easy to implement. It would benefit the private sector, state institutions, the universities, and many other sectors to encourage the government to introduce such a visa.

To conclude, if a knowledge transfer visa (KTV) is created which is as simple and quick to obtain as an online tourist visa, it will create a comforting and reassuring environment to encourage foreign visitors who are looking for something more than a short holiday. This will result in hard currency revenues in multiple ways as with ordinary tourism. However, there are potentially significant additional benefits from the bringing in of know-how, skilled people-hours of work, the scope for new types of businesses to develop, and allow Sri Lankan individuals, corporates and institutions to have doors opened for them for international business and academic opportunities. Furthermore, there is a huge Sri Lankan diaspora out there whose children and grandchildren do not have dual nationality but could be encouraged to bring their money and know-how for a longer length of time in Sri Lanka through a knowledge transfer visa.

by Gehan de Silva Wijeyeratne

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Corruption outed; Stirrings in the West

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Former President Mahinda Rajapaksa and wartime Defence Secretary and former President Gotabaya Rajapaksa paid floral tributes at the war heroes' memorial near Parliament on 20 May.

TV news showed Keheliya Rambukwella with a walking aid and grizzled unshaven, attending courts and leaving in a prison van. His son Ramith is implicated in a corruption case being heard against his father. So it’s a case of like father, like son. We recall this cricketer son was no gentleman. He supposedly broke into an office in his college – Royal, Colombo 7 – to interfere with a marks sheet or whatever.  More notoriously, returning from Australia as a member of a cricket team, he attempted opening a door of the Sri Lankan plane they were in. Doors in planes are extra strong and difficult to open; otherwise if he had succeeded, there would have been a fierce rush of air and he surely would have been dragged out to fall to the ocean or land and sure death. More seriously, havoc would have been created within the plane accompanied by dire danger to passengers.  He is supposed to be unemployed but living in a very expensive, luxurious flat.

Wages of sin

Not many like to see others suffering, particularly mothers of sons. But there was no sorrow, not a twinge, on seeing Keheliya limping and getting into a prison van; so different from the suave man he was. The reason is that one has to pay for sins and transgressions including the procurement of substandard and fake medicinal drugs for government hospitals.

There is no sympathy in Cass’ heart, even for Rambukwella Jr. since he developed within himself his father’s nature. The uppermost thought in her is that retribution is inevitable. Most people think it passes to manifest itself in the sinner’s next and future births. Not always. They suffer in this life too. Here is a solid example to prove this point.

When we women talk about corruption in this beautiful island some note that entire families are corrupt to the core and have collected vast amounts of illicit money, safely stashed away. They seem to be fine; the younger ones grinning from ear to ear, cock sure of themselves. But what about their minds, their nightly dreams? Are they afraid? Do nightmares torment them? Sure the older thieves suffer thus.

“Retribution often means that we eventually do to ourselves what we have done unto others.”

Qatar’s gift to President Trump

Why two remembrances?

Politicians particularly, often prove that Sri Lanka is a land like no other – negatively – Cass adds. The Medamulana Rajapaksa family proved this point on Tuesday 20 May.

The War Heroes Commemorative ceremony, which is Remembrance Day in Sri Lanka, is observed on May 19, when the end of the civil war in 2009 is marked. Those who died in the 28 year war, both armed forces personnel and civilians, are remembered on this day. A solemn ceremony was held in Battaramulla in the grounds of the stately National War Memorial, with the President, and army, navy and air force heads of that time present.  Also the nearest kin of those who gave their lives to save the country, mostly mothers and wives, laid red roses at the foot of the memorial.

Then surprise, surprise, another ceremony was held the following day at the same venue and most prominent were Mahinda and Gotabaya Rajapaksa. The news reporter of the channel Cass watched announced it was a memorial service for war heroes. But the war heroes had already been duly remembered the previous day by the entire nation. Pohottu members would have been present but it was not an SLPP ceremony. What was it then? A public remembrance by private persons since both brothers are out of politics and out of job now.

It is only in Sri Lanka that such a ‘circus’ can be staged. IWere the dead being used to shore waning popularity? Perfectly true, the two brothers did much to bring peace to the country; they went to war against severe objections and obstacles placed by local persons in secondary power, and foreign nations. But that does not justify a separate remembrance.

Maybe they do not know how such ceremonies are conducted in civilized foreign countries. They would not have watched the anniversary of VE Day (May 8) held in London and the respect and homage paid to WWII veterans and the remembrance of those who died in battle. Such an impressive, dignified late morning ceremony with King Charles III, Queen Camilla and other Royals present.  The country and its leaders unified in remembrance and gratitude. No politics whatsoever. In this country politics rears its Medusa head in all public occasions and even very private ones like weddings. Next year we may have two separate celebratory events for National Day – February 4.

Lies and subterfuges

As usual a mega Trump deal is surrounded by lies, denials, drawing the wool over the public eye and subterfuges which last means “deceit used in order to achieve one’s goal.”  The goal was getting a replacement for the presidential airplane which certainly is old – 40 years – and its interior not up to Trump’s garishly lavish standards. The Trump administration first approached Qatar to acquire a redundant Boeing 747 with a price around USD 400m to replace Air Force One. The other story is that Qatar reached out and offered the jet as a gift to Trump. The 747 flew to Florida in March so Trump could inspect it, which he did. A circulated report is that Qatar gifts the 747 to Trump personally to be used as his presidential jet and once he leaves the White House, it is his private possession. This tale one could well believe knowing the sort of a person Trump is and how wily Middle East potentates are: no giving without getting in return.

Cancer stalks American VVIP

Trump’s immediate predecessor has had another trauma.  President Joe Biden announced he had been diagnosed with aggressive prostate cancer, which means his days are numbered. He was the oldest US Prez but much admired and polled to be the 14th best president in the history of the US. His first wife and one-year daughter died in a car accident on December 18, 1972, just four years after marriage. He was a devoted father to his two sons aged 2 and 3 years then. At age 46, in 2015, his elder son Beau died of brain cancer, which Biden maintained was due to his service in the Kosovo war where dangerous gases were used. And now this illness at 82.  A good man given more than his fair share of tribulations.

Cruelty beyond measure

Deaths in the Gaza strip increase by the day as Israel bombards it with air missiles and debars food aid getting in. Children are dying by the hundreds and doctors in large numbers as hospitals are targeted for attack. Netanyahu has pronounced he wants the entire Gaza strip as part of Israel. How can he possibly expect this? However, at the rate the war is proceeding he will soon overcome Hamas and ride into Gaza as a vanquisher and acquirer. No nation seems to be ready to help the Palestinians.

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

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President Trump

Colombo, Sri Lanka – 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.

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

Trump’s tariffs contributed to broader economic uncertainty, weakening global trade and slowing growth. This downturn has lowered demand for Sri Lankan goods, particularly in Western markets. Apparel exports, which account for over 40% of Sri Lanka’s total exports and rely heavily on U.S. consumers, are especially vulnerable.

“As American retailers reevaluate their sourcing strategies, Sri Lankan garment manufacturers face increased competition from countries like Vietnam and Bangladesh, some of which benefit from more favourable trade agreements,” notes a trade policy analyst in Colombo.

Foreign Investment and Tourism at Risk

The trade tensions also made investors more cautious, leading to a decline in foreign direct investment (FDI) in emerging markets. Sri Lanka, already grappling with high debt levels and political instability, may find it increasingly difficult to attract investment in its export-oriented industries and infrastructure projects.

Tourism a vital source of foreign exchange could also see knock-on effects. Global economic instability tends to reduce travel spending, which directly impacts Sri Lanka’s tourism sector.

Regional Spillovers from China and India

China, a key trading partner and infrastructure investor in Sri Lanka, was one of the main targets of Trump’s tariffs. As Chinese economic growth slows due to reduced U.S. trade, its demand for Sri Lankan commodities and its ability to invest abroad could also decline. Similarly, any reduction in India’s economic engagement due to trade tensions with the U.S. may impact regional cooperation and investment flows.

Out of the Trade Bloc Loop

Perhaps, more concerning in the long term is the global realignment of trade alliances. As the U.S. withdrew from multilateral trade deals and others like the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) gained momentum, Sri Lanka risks being left behind.

A Wake-Up Call for Trade Policy Reform

The indirect but significant threats posed by Trump-era tariffs underline the urgent need for Sri Lanka to diversify its markets, join new trade alliances, and upgrade its export infrastructure.

While the Trump administration, the shift towards economic nationalism and trade protectionism continues to influence global policy. Sri Lanka, as a small and open economy, must adapt quickly or risk falling further behind.

By M. I. D Perera,
Economist

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