SRI LANKA APPAREL SECTOR BRACES FOR IMPACT FROM TRUMP’S 20% TARIFF
Nikkei – August 8, 2025
COLOMBO — From apparel brands like Gap, Levi’s and Columbia Sportswear to designer labels like Calvin Klein, Ralph Lauren and Tommy Hilfiger to lingerie boutique Victoria’s Secret, Sri Lanka has long been recognized as an ethical and trusted apparel source. But now the island’s largest forex-earning industry is facing a fresh and formidable challenge: a 20% tariff on exports to the U.S., its largest customer.
The rate took effect on Thursday.
The big question, said Yohan Lawrence, secretary general of the Joint Apparel Association Forum, will be whether Americans can afford the added expense and maintain their buying pace.
Lawrence said he’s not worried Sri Lanka-made garments will be more expensive for Americans than items from other countries because “the bar has simply moved up for everyone.”
By “everyone,” he was referring to Sri Lanka’s regional competitors like Bangladesh and Vietnam.
Lawrence said a 10% tariff that the U.S. imposed in April and called a baseline levy was absorbed mainly by manufacturers and brands. But the additional 10% might be passed directly to American consumers.
Higher prices, though, tend to eat into demand, and “clothing is something people can easily cut back on — buy a cheaper T-shirt or delay a purchase,” Lawrence said.
Moreover, the apparel industry’s low-margin, high-volume business model means even minor cost shifts can create ripples. “A few cents in the wrong direction can cost you an order,” he added.
At the heart of Sri Lanka’s economy, the apparel industry directly employs nearly 400,000 people and indirectly supports close to 800,000 more jobs. It is responsible for almost half of the country’s total export earnings. In March alone, apparel shipments rose by 11.65%, with their value reaching a six-year high of $467 million. For the first quarter, shipments grew 11.7% from a year earlier, to $1.3 billion.
