By: Staff Writer
June 08, Colombo (LNW): Sri Lanka’s apparel industry is bracing for a significant downturn following the United States’ imposition of a steep 44% tariff on Sri Lankan garment exports — one of the highest rates applied to any country.
With the U.S. being Sri Lanka’s largest single-country apparel market, this move threatens to severely undermine the sector’s competitiveness and could lead to a projected 20% drop in exports.
In response, Sri Lankan apparel manufacturers and multinational textile companies are urgently exploring alternative markets to diversify their exports and reduce reliance on the U.S. Among them, leading fabric manufacturer Teejay Lanka is proactively adapting its operations to weather the disruption.
Teejay Lanka, a multinational with textile manufacturing facilities in Sri Lanka, India, and East Asia, is taking strategic measures to cushion the impact of the new tariffs. “While the current tariff ruling is being challenged in court, Teejay is closely monitoring the situation and proactively adapting its operations,” Group CEO Pududu de Silva noted in the company’s annual report.
The group’s ability to shift production across multiple locations gives it a crucial advantage in maintaining supply chain stability and cost competitiveness. Teejay is also leveraging its balanced portfolio between U.S. and European Union markets to spread risk.
In a bid to expand its global footprint and reduce exposure to U.S. policy volatility, Teejay recently launched partner operations in Egypt and Indonesia. These new facilities have already begun commercial operations in the 2024/25 financial year. Two dedicated teams have been assigned to ensure operational efficiency at these new sites, reinforcing Teejay’s strategy of sustainable growth and global market expansion.
Beyond geographic diversification, Teejay is also investing in renewable energy — including solar and biomass — to reduce operational costs and enhance long-term sustainability.
Despite the current challenges, Sri Lanka’s apparel sector remains committed to ethical and sustainable manufacturing practices. Industry leaders are urging the government to take swift action to support the sector and help find solutions to counter the adverse effects of the tariffs.
As pressure mounts from shifting U.S. trade policies, Sri Lanka is doubling down on efforts to strengthen trade ties with other regions, aiming to secure new markets and protect one of its most vital export industries.
