Sri Lanka takes cautious stand on unpredictable U.S. economic shift – Chathuranga

In a detailed Facebook post, Chathuranga Abeysinghe, Sri Lanka’s Deputy Minister of Industry and Entrepreneurship Development, shed light on Sri Lanka’s response to the United States’ sudden shift in economic policy under President Donald Trump.

According to the Deputy Minister, while countries such as Canada, Mexico, and the European Union publicly opposed the U.S. government’s new closed economic stance, Sri Lanka maintained a quiet approach.

The reason was that Sri Lanka’s trade surplus with the United States was minimal and had little impact on the global trade equation.

Minister Abeysinghe explained that Sri Lanka’s response was based on careful analysis.

A primary committee, chaired by the Deputy Foreign Minister, was formed to study the issue. The Ministry of Industries, along with other stakeholders, contributed to these discussions.

Meetings were held on March 13, 20, and 26, and focused on “What if” scenarios to prepare for possible outcomes.

Despite global expectations that the United States would adjust tariffs evenly for all trading partners, the Trump administration introduced an unexpected tax policy. “They broke all standard economic theories,” said Abeysinghe, adding that even think tanks like the Advocata Institute, which supports free trade, did not foresee such a move.

Instead of balancing tariffs, the United States calculated each country’s trade deficit based on import volumes. This has caused instability worldwide. “This was not just irrational to us, but to the entire global economy,” he said.

Amid this confusion, Sri Lankan social media users speculated that the country would suffer a 44 percent economic impact, claims the Deputy Minister dismissed as exaggerated.

Abeysinghe said that larger nations are preparing for trade battles, while Sri Lanka must focus on negotiation. “The United States is trying to return to a 1930s style economic model, producing everything domestically,” he said.

He added that the U.S. appears willing to enter a temporary recession and is pulling countries such as Canada and Mexico into it. The global response, particularly from China and the European Union, remains uncertain.

“This is how the global economy works,” he noted. “It is a clear reminder that Sri Lanka must strengthen its production capacity, diversify its exports in both products and markets, and avoid over-dependence.”

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