The Colombo Rubber Traders Association (CRTA) said on Friday it was deeply concerned about the recent imposition of a 44 per cent blanket tariff by the US on all imports from Sri Lanka, particularly its devastating impact on Sri Lanka’s natural rubber industry.
As one of the country’s key export sectors, the natural rubber industry contributes significantly to both employment and foreign exchange earnings. Since the present tariff is 12.5 per cent, the additional 44 per cent will raise the total tariff to 56.5 per cent, making Sri Lankan rubber exports highly uncompetitive in the US market. This is expected to have a far-reaching impact on rubber tappers, their families, and Sri Lanka’s broader economy, the CRTA said in a statement.
The natural rubber sector in Sri Lanka supports over 150,000 rubber tappers/harvesters, many who work in rural areas. These workers, along with their families, depend on the industry for their livelihoods. Moreover, the rubber industry encompasses a diverse range of businesses, from small-scale plantations to large-scale exporters, all playing a vital role in the sector's growth and sustainability. The 56.5 per cent tariff imposed by the US has made Sri Lankan rubber exports increasingly uncompetitive, threatening to reduce demand for local rubber in this key market.
In 2023 and 2024, Sri Lanka's natural rubber exports to the US were valued at US$1.2 million. In comparison, exports in 2022 amounted to $1.9 million, highlighting a notable contribution to the country's foreign exchange earnings. However, the implementation of this tariff is expected to further erode the competitiveness of Sri Lankan rubber in the US market, leading to a continued decline in export revenue, the CRTA said.
The consequences of this tariff extend beyond just the rubber sector. Rubber tappers, who form the backbone of the industry, face the prospect of losing their jobs as companies struggle to compete. Many tappers live in rural communities where alternative employment opportunities are limited, and their families depend on the income generated from rubber tapping. A downturn in the industry could lead to an economic crisis in these areas, where the rubber trade has been a reliable source of income for decades.
The Sri Lankan government must act swiftly to mitigate the negative effects of this tariff, the CRTA said, urging the following actions:
The CRTA firmly believes that with prompt action from the government and effective collaboration between the private and public sectors, Sri Lanka can mitigate the impact of this tariff. By working together, Sri Lanka can secure a favourable resolution for Sri Lanka's natural rubber industry and protect the livelihoods of thousands of rubber tappers, their families, and the broader Sri Lankan economy.
“We are at a critical juncture, and immediate action is essential. By collaborating with the government, the CRTA is committed to finding sustainable solutions that will protect the interests of the rubber industry, safeguard jobs, and maintain the vital foreign exchange earnings that this sector contributes to our economy,” said Harin de Silva, Chairman of the Colombo Rubber Traders Association.
The Ministry of Foreign Affairs said today that unilateral action by the UK and other countries in imposing sanctions on certain individuals do not assist but serve to complicate the national reconciliation process underway in Sri Lanka.
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