Sri Lanka’s largest apparel exporter, Brandix, has confirmed that U.S. import tariffs have not yet resulted in order cancellations, but the real test may come in the final months of 2025.
Brandix Managing Director Hasitha Premaratne made the statement during a recent panel discussion hosted by the Sri Lanka–USA Business Council of the Ceylon Chamber of Commerce in Colombo. He emphasized that while the immediate impact of the tariffs has been manageable, the fourth quarter which includes Black Friday and Christmas sales could bring tougher challenges for Sri Lanka’s garment sector.
“We haven’t seen cancellations through September,” Premaratne said, “but margins are under pressure, and the final quarter is a concern.”
Brandix exports heavily to the United States, and the country now faces a 44% reciprocal tariff, imposed by former U.S. President Donald Trump. A temporary 90-day tariff pause, which began on April 10, 2025, is set to expire on July 9, and with no resolution yet, manufacturers like Brandix are bracing for uncertainty.
According to Premaratne, nearly all U.S. brands working with Brandix are in negotiations to share the cost of the 10% baseline tariff. Only “one or two brands” have agreed to fully absorb the cost without passing it on to suppliers. The rest are expecting cost-sharing arrangements, putting pressure on Brandix to cut internal costs to stay competitive.
“This will definitely impact our margins,” Premaratne admitted. “We’ve rolled out strategic action points to reduce operational expenses and cushion the impact.”
Despite the tense trade climate, Brandix remains cautiously optimistic. Premaratne said that many U.S. brands are taking a “wait-and-see” approach rather than reshuffling their supply chains abruptly. The brand loyalty and long-term relationships with Sri Lankan manufacturers have helped avoid sudden disruptions, for now.
Still, the real challenge lies ahead. As U.S. retailers analyze inventory levels and consumer spending trends in the lead-up to the holiday season, they may begin trimming orders especially if tariff costs are passed on to inflation-weary consumers.
“Brands are worried that higher prices will hurt sales,” Premaratne said. “Everyone’s watching the numbers and planning accordingly.”
With tariff talks ongoing and economic uncertainty mounting, Brandix’s future and that of Sri Lanka’s broader export economy will likely hinge on what happens after July 9, when the current tariff grace period ends.
