- Sri Lanka’s Global Trade Crossroads: Chamber Leads While World Economy Wobbles
With the global economy caught in a whirlwind of uncertainty, Sri Lanka finds itself at a critical juncture. As new trade barriers emerge and economic giants flex their muscles, Sri Lanka must pivot fast. The Ceylon Chamber of Commerce has stepped up to help the nation navigate this storm, urging policymakers and businesses to think boldly, act fast, and reframe the country’s export strategy before it’s too late.
Chamber Charts the Course: Steering Sri Lanka Through Trade Upheaval
In response to escalating trade tensions and shifting economic dynamics, the Ceylon Chamber of Commerce has taken a front-row seat in shaping the nation’s trade policy. Back in March 2025, the Chamber submitted a policy paper to the Lakshman Kadirgamar Institute, guiding critical government discussions. The Chamber is also actively involved in the Presidential Committee charged with Sri Lanka’s trade response following the U.S. tariff bombshell announced on April 2.
The Chamber’s most anticipated move is its upcoming seminar on June 11, titled “Navigating Global Trade Shifts: Positioning Sri Lanka’s Exports for the Future.” The event will spotlight addresses from key figures including Trade Secretary K.A. Vimalenthirarajah and policy researcher Dr. Asanka Wijesinghe. Topics like anti-dumping policies and sector-specific insights especially from apparel and seafood will dominate the dialogue.
IMF Flags Trouble: Growth Forecasts Slashed
The April 2025 IMF update delivered bad news: global growth projections have been cut by 0.5%, with South Asia including Sri Lanka, seeing sharp downward revisions. The driver? Tariff uncertainty, particularly from the U.S., which is already having a chilling effect on markets in the UK, Europe, and the United States, Sri Lanka’s key export destinations. The World Bank mirrored these warnings in its April 2025 forecast, noting stark slowdowns compared to just six months prior.
EU GSP+ in Focus: Protecting Sri Lanka’s Second-Largest Export Market
Beyond U.S. tariffs, Sri Lanka’s policymakers are scrambling to ensure continued access to the EU’s GSP+ scheme a critical mechanism that makes Sri Lankan goods more competitive in Europe. In 2024, trade between Sri Lanka and the European Union hit EUR 3.7 billion, with a EUR 1.7 billion surplus favoring Sri Lanka. With the EU remaining the nation’s second-largest export market, safeguarding GSP+ status is paramount.
Turning Crisis Into Reform: The Second Wave of Economic Overhaul
Sri Lanka’s economic playbook is changing fast. The 2022 debt crisis triggered sweeping legislation from the Central Bank Act to the Economic Transformation Act. Now, facing a new external shock, the country is gearing up for a second wave of reforms.
The roadmap includes ending para-tariffs, establishing transparent and rules-based tariff structures, tackling non-tariff barriers, and modernizing outdated customs protocols. The full rollout of the National Single Window system is also on the table to improve trade efficiency and reduce red tape.
A Nation Weathered, But Not Broken: From Crisis to Comeback
From the 2018 constitutional crisis to the 2019 Easter bombings and the 2020 pandemic, Sri Lanka has endured one shock after another. The economic collapse of 2022–2024 was among the worst in its post-independence history. And yet, amid signs of recovery in early 2025, the country faces a new test tariff retaliation that could undo recent gains. The Ceylon Chamber and reformists within government see this as a final wake-up call to overhaul trade structures and position the country for long-term stability.
The Trump Tariff Effect: U.S. Hits Sri Lanka with 44% Blow
Former President Donald Trump has returned to the spotlight with a vengeance, expanding his infamous tariff policies beyond China to include new targets Sri Lanka among them. His administration’s concern? A ballooning U.S. trade deficit now exceeding USD 1 trillion.
With a USD 2.6 billion trade surplus in 2024, Sri Lanka was firmly on Washington’s radar. On April 2nd, a 44% reciprocal tariff was announced, hitting Sri Lankan exports hard. Though dubbed a “reciprocal tax,” it acts as a full-scale import tariff based directly on the trade imbalance with the U.S.
The Big Question: Can Sri Lanka Pivot Before the Next Shock Hits?
The writing is on the wall. Between tariff turbulence, shifting alliances, and global economic stagnation, Sri Lanka has no time to waste. The Ceylon Chamber’s leadership, combined with a reform-focused administration, could just tip the balance. But if policy inertia sets in, the island risks falling further behind in an increasingly protectionist world.
Time is ticking. Will Sri Lanka ride the trade winds or get swept away by them?
