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On 2 April, US President Donald Trump imposed a 44% tariff on Sri Lankan exports to the United States. This tariff significantly affects Sri Lanka's rubber product exports, the country's second-largest export to the US, accounting for 11% and valued at over USD 300 million in 2023.
The reciprocal tariffs imposed across all exporters to the US could potentially reduce overall US demand for rubber products. Consequently, this analysis, conducted using World Bank's SMART partial equilibrium model, reveals that Sri Lanka’s rubber product exports to the US may decline by approximately 28% (over USD 80 million). The model simulated the impact on US demand of an increase in the weighted average tariff for US rubber products to 27%.
Note
These are preliminary estimates, and actual outcomes may vary depending on other factors. Notably, Sri Lankan rubber exports may face a further loss in competitiveness, as the 44%tariff on its exports is markedly higher than those imposed on key regional competitors such as Thailand (36%), Malaysia (24%), Indonesia (32%), and India (26%).
Source
World Bank 'World Integrated Trade Solution (WITS)' at https://wits.worldbank.org/ [last accessed 3 April 2025].
Research by: Mathisha Arangala and Anushan Kapilan
Visualisation By: Muaadh Himaz
