Urgent action needed to save rubber exports from US tariffs

The Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP) has urged the Government to intensify negotiations with the US following the announcement of a 30 per cent reciprocal tariff on Sri Lankan rubber product imports, effective from August 1.

The announcement, made by US President Donald Trump, has triggered widespread concern among exporters and industry stakeholders, the association said in a media release.

SLAMERP Chairman Pushpika Janadheera noted that Sri Lankan exporters are already under pressure and cannot absorb a steep 30 per cent tariff without losing ground in global markets. This tariff comes at a time when Sri Lanka is striving to revive its manufacturing sector post-crisis, leaving it especially vulnerable. Competing nations like Malaysia, Vietnam, and India enjoy stronger global positions, bolstered by favourable trade terms and lower production costs. Without urgent intervention, Sri Lanka risks losing long-standing buyers to these more competitive markets.

The association highlighted that Sri Lanka’s tyre exports face a significant threat from the new 30 per cent US tariff. Vietnam currently faces only a 20 per cent tariff, while India’s rate is yet to be finalised. “If India’s tariff is settled below ours, our tyre sector will face a serious setback,” Mr. Janadheera stated.

The threat is particularly severe in the solid tyre segment, which exports over 50 per cent of its global volume to the US. With over 80 per cent of global demand for specialised solid and press-on tyre designs coming from the American market, a 30 per cent tariff would severely undermine Sri Lanka’s price competitiveness, likely prompting global buyers to shift towards countries that enjoy lower tariffs.

SLAMERP further emphasised the challenges faced by Sri Lanka’s glove exporters. “We are especially disadvantaged on gloves, as Malaysia and Vietnam face significantly lower tariffs of 25 per cent and 20 per cent respectively,” Mr. Janadheera said. Many of these rubber exports, including medical gloves and personal protective equipment, are essential products for healthcare, laboratories, and industrial safety and must be given special consideration in tariff negotiations.

Beyond export revenues, SLAMERP underscored the broader economic consequences. More than 150,000 Sri Lankans are involved in rubber cultivation, with tens of thousands more employed directly and indirectly in the rubber manufacturing industry. “This is not just about companies. It’s about entire rural communities whose livelihoods depend on the rubber sector,” he said.

Mr. Janadheera also stated that prolonged uncertainty caused by steep tariffs could stall future investment in the sector. “No investor will commit to an industry facing unstable and unpredictable trade conditions. We risk discouraging much-needed foreign direct investment at a time when it’s most crucial.”

Additionally, SLAMERP stressed the need for immediate and strategic government intervention. “We urge the Government to recognise the seriousness of this development and begin active negotiations with US authorities,” Mr. Janadheera said. “This is about much more than trade. It’s about safeguarding livelihoods, protecting rural incomes, and preserving one of Sri Lanka’s most critical export sectors.”

SLAMERP represents one of the country’s most significant export sectors, which contributed US$1 billion in export revenue in 2024, making it the third-largest export sector in Sri Lanka. Critically, one-third of this revenue comes from exports to the US. With such a substantial share of earnings tied to the US market, the proposed tariff poses a direct threat to the sector’s stability.

 “Without proactive intervention, the livelihoods of thousands of Sri Lankans are at risk,”Mr. Janadheera said. “We must act now to protect the future of our industry and the communities it supports.”