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Reuters
6 days ago
- Business
- Reuters
Sri Lanka's apparel industry counts on cutting US tariff to compete with rivals
COLOMBO, July 10 (Reuters) - Sri Lanka's garments sector is pinning its hopes on further discussions with the U.S. government after Donald Trump's administration's 30% tariff on the nation has placed it at a disadvantage to some of its biggest rivals. The United States has accounted for about 40% of Sri Lanka's apparel exports. Last year, they were worth about $1.9 billion, industry data shows. But in a letter on Wednesday, Trump notified Sri Lankan President Anura Kumara Dissanayake of the 30% tariff from August 1, a rate well above the 20% levy faced by one of its major competitors Vietnam. The U.S. tariff on neighbouring Bangladesh was, however, set at 35%, while Cambodian exports face a 36% levy. Tariffs on India, also a big U.S. supplier, have yet to be made public. "If this is the end number, Sri Lanka is in trouble because our competitors, such as Vietnam, have received lower tariffs," Yohan Lawrence, of the Joint Apparel Associations Forum, or JAAF, representing the largest apparel companies, told Reuters. "But we are hopeful we can continue discussions." The government on Thursday said it was continuing talks with Washington. "Our intention is to get the best rate for Sri Lanka so it's a balancing act we are taking forward," Duminda Hulangamuwa, senior presidential adviser, told reporters. India is potentially the biggest threat to Sri Lanka's clothing industry. "India as the regional giant can be the game changer. If theirs (tariff) is similar to Vietnam, the impact would be considerable," said Raynal Wickremeratne of Softlogic Stockbrokers. Sri Lanka's apparel exports to the United States in the first five months of 2025 were $747 million. That compared with apparel exports for the whole of last year of $1.9 billion to the U.S. and $4.8 billion worldwide, JAAF data shows. The exports are the country's third largest source of foreign currency. As the U.S. directs some of its most punishing tariffs at China, which faces a 55% levy, U.S. clothing imports from China fell to their lowest monthly level in 22 years in May. Sri Lanka's Central Bank Governor Nanadalal Weerasinghe said on Thursday it was too early to measure the wider economic impact of the tariff announcement on Sri Lanka's economy. Last week, the International Monetary Fund said Sri Lanka's economic outlook remains positive, despite significant risks to macroeconomic and social stability from global trade policy uncertainties.
Fibre2Fashion
14-07-2025
- Business
- Fibre2Fashion
UK trade reforms to boost Sri Lankan apparel exports, jobs
The UK government recently unveiled a package of reforms to simplify imports from developing countries. New measures include simplifying rules of origin, enabling more goods from countries like Sri Lanka, Nigeria and the Philippines to enter the United Kingdom tariff-free, even when using components from across Asia and Africa. Upgrades to the Developing Countries Trading Scheme (DCTS) make it easier for businesses to trade with the United Kingdom and help lower prices on the UK high street. The UK has unveiled a reforms package to simplify imports from developing nations. New measures include simplifying rules of origin, enabling more goods from countries like Sri Lanka, Nigeria and the Philippines to enter the UK tariff-free, even when using components from across Asia and Africa. For Sri Lanka, the rules of origin for the garments sector specifically will be liberalised. The changes, announced as part of the UK's wider Trade for Development offer, aim at supporting economic growth in partner countries, while helping UK businesses and consumers access high-quality, affordable goods. The announcement builds on the UK's Trade Strategy published last month. 'The most significant positive change for Sri Lanka is that the rules of origin for the garments sector specifically will be liberalised. The changes will ensure that DCTS countries can now source their materials from a wider range of nations and will give manufacturers from countries such as Sri Lanka the opportunity to take advantage of 0-per cent tariffs on garments. These changes are expected to be in place by early 2026,' an official UK government release said. 'This is a win for the Sri Lankan garment sector, and for UK consumers. With the UK being the second largest export market and garments making up over 60 per cent of that trade, we know manufacturers here will welcome this announcement,' British high commissioner to Sri Lanka Andrew Patrick said. 'With the Sri Lankan government's ambition to grow exports, and with the simplification of rules of origin for other sectors too, we strongly encourage more exporters to explore how they can benefit from the preferences offered by the DCTS,' he added. 'We are delighted that, for garments, it will now be possible to source more raw material regionally and continue to qualify for duty free export to the UK. This will be a game-changer for our trade with the UK under the DCTS,' Yohan Lawrence, secretary general of the Joint Apparel Association Forum (JAAF) in Sri Lanka , said. 'We believe that the changes will also deliver significant improvements against the objectives of the Scheme. At around $675 million in value, the UK is the second largest market for Sri Lanka Apparel, accounting for close to 15 per cent of apparel exports, while the industry supports a million livelihoods across the country,' he noted. 'This announcement will help secure employment opportunities and ensure sustainable growth in Sri Lanka by allowing us to compete on equal terms with our major competitors, and we expect exports to increase significantly when the new rules come into effect,' Lawrence added. Launched in 2023, following the United Kingdom's exit from the European Union, DCTS is the UK's flagship trade preference scheme. Covering 65 countries, it offers reduced or zero tariffs on thousands of products. In addition to the DCTS changes, the United Kingdom will continue to provide targeted support to help exporters in Sri Lanka to access the UK market and meet import standards particularly focused on agri-foods and apparel sectors. This is through programmes being delivered by the International Trade Centre (ITC) in partnership with the Sri Lanka Export Development Board. Fibre2Fashion News Desk (DS)
Free Malaysia Today
10-07-2025
- Business
- Free Malaysia Today
Sri Lanka's apparel industry alarmed by US tariff of 30%, hopes for cut
Sri Lanka's apparel exports to the US in the first five months of 2025 stood at US$747 million. (EPA Images pic) COLOMBO : Distress is in store for Sri Lanka's garments sector if the island nation is unable to clinch a tariff lower than the 30% figure US President Donald Trump has clamped on imports from Colombo, a top industry body warned today. The US takes about 40% of apparel exports, helping to pull in US$1.9 billion last year and making the industry Sri Lanka's third largest earner of foreign exchange, employing 300,000 people, most of them women. 'If this is the end number, Sri Lanka is in trouble because our competitors, such as Vietnam, have received lower tariffs,' Yohan Lawrence, of the Joint Apparel Associations Forum (JAAF), representing the largest apparel companies, told Reuters. 'But we are hopeful we can continue discussions,' Lawrence said. In a letter yesterday, Trump notified President Anura Kumara Dissanayake of the 30% tariff from Aug 1, a rate well above the 20% levy faced by competitor Vietnam. The US tariff on neighbouring Bangladesh, another major South Asian garment exporter, was set at 35%, though the levy on India, also a big US supplier, has not yet been unveiled. The Sri Lankan government did not immediately respond to a request for comment but called a news briefing later in the day, to be attended by central bank governor Nanadalal Weerasinghe as well as trade and finance officials. Sri Lanka's apparel exports to the US in the first five months of 2025 stood at US$747 million, while its total apparel exports last year were worth US$4.8 billion, JAAF data shows. Last week, the International Monetary Fund (IMF) said Sri Lanka's economic outlook remains positive, despite significant risks to macroeconomic and social stability from global trade policy uncertainties. When he initially unveiled his tariffs on April 2, Trump had threatened a levy of 44% on about US$3 billion of the Indian Ocean nation's exports.
South China Morning Post
10-07-2025
- Business
- South China Morning Post
Trump's 30% tariff threatens to tear apart Sri Lanka's garment industry
Distress is in store for Sri Lanka 's garment sector if the island nation is unable to clinch a tariff lower than the 30 per cent figure US President Donald Trump has clamped on imports from Colombo, a top industry body has warned. Advertisement The United States takes about 40 per cent of the country's apparel exports, helping to pull in US$1.9 billion last year and making the industry Sri Lanka's third largest earner of foreign exchange, employing 300,000 people, most of them women. 'If this is the end number, Sri Lanka is in trouble because our competitors, such as Vietnam, have received lower tariffs,' said Yohan Lawrence, secretary general of the Joint Apparel Associations Forum (JAAF), which represents the largest apparel companies. 'But we are hopeful we can continue discussions.' 13:08 Why Ceylon tea is inseparable from Sri Lanka and its people Why Ceylon tea is inseparable from Sri Lanka and its people In a letter on Wednesday, Trump notified President Anura Kumara Dissanayake of the 30 per cent tariff from August 1, a rate well above the 20 per cent levy faced by competitor Vietnam
Yahoo
10-07-2025
- Business
- Yahoo
Sri Lanka's apparel industry alarmed by US tariff of 30%, hopes for cut
By Uditha Jayasinghe COLOMBO (Reuters) -Distress is in store for Sri Lanka's garments sector if the island nation is unable to clinch a tariff lower than the 30% figure U.S. President Donald Trump has clamped on imports from Colombo, a top industry body warned on Thursday. The United States takes about 40% of apparel exports, helping to pull in $1.9 billion last year and make the industry Sri Lanka's third largest earner of foreign exchange, employing 300,000 people, most of them women. "If this is the end number, Sri Lanka is in trouble because our competitors, such as Vietnam, have received lower tariffs," Yohan Lawrence, of the Joint Apparel Associations Forum (JAAF) representing the largest apparel companies, told Reuters. "But we are hopeful we can continue discussions." In a letter on Wednesday, Trump notified President Anura Kumara Dissanayake of the 30% tariff from August 1, a rate well above the 20% levy faced by competitor Vietnam. The U.S. tariff on neighbouring Bangladesh, another major South Asian garment exporter, was set at 35%, though the levy on India, also a big U.S. supplier, has not yet been unveiled. The Sri Lankan government did not immediately respond to a request for comment but called a news briefing later in the day, to be attended by central bank governor Nanadalal Weerasinghe as well as trade and finance officials. Sri Lanka's apparel exports to the United States in the first five months of 2025 stood at $747 million, while its total apparel exports last year were worth $4.8 billion, JAAF data shows. Last week, the International Monetary Fund (IMF) said Sri Lanka's economic outlook remains positive, despite significant risks to macroeconomic and social stability from global trade policy uncertainties. When he initially unveiled his tariffs on April 2, Trump had threatened a levy of 44% on about $3 billion of the Indian Ocean nation's exports. Sign in to access your portfolio
