US Imposes 30% Tariff on Sri Lanka Imports Threatening 50,000 Jobs

Sri Lanka faces significant economic challenges following the U.S. decision to impose a 30% tariff on all imports from the island nation, effective August 1, 2025. The country's main opposition criticized the government for poor negotiation efforts that led to this tariff, warning that it could endanger approximately 50,000 export sector jobs. The tariff, part of a broader U.S. trade initiative under President Donald Trump aimed at correcting trade imbalances, is notably higher than the 20% tariff imposed on Vietnam, which secured lower duties by agreeing to reduce tariffs on American goods. Sri Lanka's garments sector, which relies heavily on exports to the U.S. and employs around 300,000 people, is particularly vulnerable, with industry leaders expressing concern that the higher tariff puts them at a competitive disadvantage compared to countries like Vietnam and Bangladesh. The government has called for ongoing discussions to seek tariff reductions, while the International Monetary Fund maintains a cautiously positive economic outlook despite the risks posed by evolving global trade policies. Analysts emphasize that this tariff reduction from an initially proposed 44% rate is the sharpest among affected countries but still represents a substantial economic impact.