Sri Lanka’s trade relationship with the United States remains one of its strongest bilateral economic partnerships, but emerging tariff pressures from Washington are raising fresh concerns about the sustainability of this advantage. The US continues to be Sri Lanka’s single largest export destination, accounting for nearly a quarter of total merchandise exports, with trade data for 2025 showing a clear surplus in Sri Lanka’s favour.
Exports to the US reached $2.99 billion in 2025, while imports stood at $732 million, generating a trade surplus of over $2.2 billion. Sri Lankan exports also recorded 3.07% growth compared to 2024, underscoring continued demand for products such as apparel, rubber-based goods, coconut kernel products, spices, concentrates and processed foods. Apparel alone contributes the bulk of foreign exchange earnings from the US market, making the sector particularly sensitive to policy shifts.
However, recent increases in US tariffs on selected imports introduced as part of broader protectionist measures have raised red flags among exporters. Industry stakeholders warn that higher duties could erode price competitiveness, especially for small and medium-scale manufacturers already grappling with rising input costs, energy prices and logistics challenges.
Against this backdrop, senior officials from the US Embassy in Sri Lanka recently held discussions with the Export Development Board (EDB), signalling renewed diplomatic engagement on trade facilitation. Talks focused on tariff exemptions, improving market access and encouraging bilateral investment flows. US officials also invited Sri Lankan exporters to participate in the SelectUSA 2026 Investment Summit, aimed at strengthening commercial links and attracting foreign direct investment into the American market.
The Sri Lankan government, meanwhile, is pursuing a parallel strategy to safeguard export earnings. Authorities are actively lobbying for preferential treatment for key export categories, while promoting diversification into higher-value and niche products. The EDB has also invited US buyers, investors and media to Sri Lanka Expo 2026, positioning the country as a reliable sourcing destination amid global supply chain realignments.
While Sri Lanka currently enjoys a strong trade surplus with the US, analysts caution that overdependence on a single market leaves exporters exposed to sudden policy changes. The coming months will test whether diplomatic engagement and strategic repositioning can offset the impact of rising tariffs and preserve one of Sri Lanka’s most vital trade relationships.
