ECONOMYEXT – Sri Lanka’s rubber sector is urging negotiations with the Trump administration and a relief package for workers as companies face the prospect of losing market the US market where taxes have risen to 56.5 percent.
“Since the present tariff is 12.5 percent, the additional 44 percent will raise the total tariff to 56.5 percent, making Sri Lankan rubber exports highly uncompetitive in the US market,” Colombo Rubber Traders Association said in a statement.
“This is expected to have a far-reaching impact on rubber tappers, their families, and Sri Lanka’s broader economy.
“The natural rubber sector in Sri Lanka supports over 150,000 rubber tappers/harvesters, most of whom work in rural areas. These workers, along with their families, depend on the industry for their livelihoods.”
The tariffs were announced when the US Fed was on the tail end of a rate hiking cycle. On Friday commodity prices started to fall steeply.
Sri Lanka also imports rubber, especially for rubber tyres.
The Rubber Traders Association are seeking the following support from the government.
1. Immediate diplomatic engagement with US authorities: The government must engage with the US government and relevant trade bodies to negotiate a significant reduction or removal of the 44% tariff.
2. Diversification of export markets: The government should encourage diversification of export markets for Sri Lankan natural rubber to reduce reliance on the US market.
3. Support for local rubber farmers and businesses: Immediate financial assistance, subsidies, or relief packages should be provided to affected rubber farmers and businesses to help them survive the economic downturn caused by the tariff.
4. Long-term strategic planning for the rubber sector: The government should work with the CRTA to develop a comprehensive strategy for the future growth and sustainability of the rubber sector, which includes investing in technology, improving supply chain efficiency, and exploring new markets.