A surprise ruling by a US trade court blocking most of the steep tariffs proposed by former President Donald Trump has offered Sri Lanka temporary relief, according to local economists.
With the majority of Sri Lanka’s exports headed to the US, the proposed 44% reciprocal tariff posed a significant threat to the country’s export earnings.
The court decision comes as a senior Sri Lankan delegation is in Washington for negotiations, providing a short-term breather in trade relations.
Senior Economist Prof. Sirimal Abeyratne emphasized that while the ruling provides breathing space, Sri Lanka must continue efforts to become more globally competitive.
“Sri Lanka should not wait for the US to act—we must pursue an export-driven strategy and diversify our markets,” Prof. Abeyratne told Mirror Business.
Economist Talal Rafi welcomed the ruling but cautioned that US political dynamics could still allow Trump to find alternative ways to impose tariffs.
“The government should not become complacent; this is only a temporary reprieve,” Rafi warned.
The US court ruled that Trump had overstepped his executive authority in imposing the sweeping tariffs, which had already caused disruption in global trade.
Financial markets responded positively to the decision, with gains seen in chipmakers, automakers, and luxury brands, while the US dollar also strengthened.
Despite the positive ruling, uncertainty remains about the duration of the relief and what future trade actions might be taken.
Rafi also noted that the tariff threat should serve as a wake-up call, pushing Sri Lanka to adopt structural reforms and lower trade barriers.
