By: Isuru Parakrama
April 03, Colombo (LNW): Sri Lanka’s apparel sector suffered a sharp decline in stock market trading following the United States’ decision to impose a 44 per cent reciprocal tariff on imports.
The apparel industry, which is the country’s largest export sector, relies heavily on the US market, making the tariff announcement a significant setback for local manufacturers and investors, according to global economic news outlet Economy Next.
Stockbrokers told Economy Next that investor sentiment turned negative immediately after US President Donald Trump’s announcement on Wednesday. By mid-day trading on Thursday, shares of major apparel companies had dropped noticeably, reflecting concerns over the potential impact on export revenue.
Amongst the worst-hit was Hela Apparel Holdings, which fell by 8.11 per cent to Rs. 3.40. Hayleys Fabric also saw a substantial decline of 11.46 per cent, trading at Rs. 42.50, whilst Hayleys Fibre dropped 5.15 per cent to Rs. 46.00. Teejay Lanka, another key player in the industry, saw its stock price fall by 9.06 per cent to Rs. 46.20.
The United States remains Sri Lanka’s largest apparel export destination, generating $1.92 billion in 2024, according to the Export Development Board. The newly announced tariff applies to all countries exporting to the US, raising concerns over the competitiveness of Sri Lankan apparel in global markets.
The broader Colombo Stock Exchange also reflected the impact, with the benchmark index down by 2.06 per cent, shedding 329.91 points to settle at 15,677.53 by mid-day trading on Thursday.
Other exporters outside the apparel sector also experienced losses, with Haycarb falling by 5.31 per cent to Rs. 78.50 and Dipped Products dropping 7.53 per cent to Rs. 52.80.
Industry analysts warn that if the tariff remains in place for an extended period, Sri Lanka’s export sector may struggle to maintain its foothold in the US market, potentially leading to further economic challenges for the country’s manufacturing sector.
