Local firms to relocate owing to US trade tariffs
Sri Lankan companies, particularly in the manufacturing sector, are likely to relocate due to the impact of US trade tariffs and domestic taxation.
The stifling trade tariffs by the US have resulted in local firms in certain industries, particularly in tea value addition, considering relocating to Arab countries, an industry source told The Sunday Times Business.
“The recent trade tariffs by the US are giving an impetus for such firms and setting up in Arab nations, where tax is low and income tax is zero,” said Sanjeewa Wickramanayake, Chairman of E-wis. He noted that Sri Lanka’s export tax and the recent US tariff have given them no choice.
The US has imposed “reciprocal” tariffs on imports from nearly all global nations, a move expected to significantly impact the economy and disrupt global trade. A local businessman said that he is considering setting up manufacturing facilities in India. He said that there is zero duty on certain goods imported from India, especially electronic items. “We can also import certain items from China and get a zero duty benefit,” he said.
In the meantime, Sri Lanka stands to lose a lot of FDI owing to regressive tax policies.
A businessman said that due to the local tariff structure on top of the US tariffs, foreign direct investments are also drying up fast.
A high-end Korean electronics brand is reconsidering setting up a manufacturing plant in Sri Lanka, while local businessmen are considering setting up factories in India, due to the lack of stability in the country’s policies, top officials said.
“The Korean company is concerned about the tariff policies on important exports as well as the tax policy,” an official said.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!