Instead of the long-awaited US-Lanka joint statement on Trump’s reciprocal tariff, which local exporters were led to believe would be immensely beneficial to this country and said to be in the ‘good news’ pipeline by the JVP Government, what came was a bolt from the blue to flatten the pumped-up hopes of the people and [...]

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‘What will be will be’ as Lanka’s exports aimlessly drift toward Trump’s tariff-berg

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Instead of the long-awaited US-Lanka joint statement on Trump’s reciprocal tariff, which local exporters were led to believe would be immensely beneficial to this country and said to be in the ‘good news’ pipeline by the JVP Government, what came was a bolt from the blue to flatten the pumped-up hopes of the people and bring them nearer to the brink of an economic debacle, with no lifelines in sight to clutch or hold.

If the JVP government itself had believed in its own optimism, its self-fed delusions would have suffered a terrible blow when Trump on Wednesday announced a 30 per cent tariff hike on all exports from Sri Lanka to the US market.

Until the bad news landed on local doorsteps at the midnight hour on Wednesday, Lankan exporters had peacefully slept on cloud seven, seduced to strip all vestiges of doubt and totally believe the expert team sent to Washington DC had secured the best deal for Lanka and gained for her exports an unassailable foothold in the US market, to the envy of her foreign rivals.

On Thursday morning, to redouble the spin and supplant the bad with the good, the chorus of praise was led by former JVP MP Suriyapperuma from his newfound bureaucratic altar as Finance Ministry Secretary, who hailed the exceptional feat of the negotiating team to have bagged such an unbeatable deal by winning ‘one of the highest reductions in the region.’

The US President, in the letter sent to the Lankan President, simply called the 30 per cent tariff imposed ‘necessary to correct the many years of Sri Lanka’s tariff and non-tariff policies and trade barriers causing these unsustainable trade deficits against the United States. This deficit is a major threat to our economy and, indeed, our national security.’

INDOMITABLE TRUMP: The unshakeable resolve that made the world his oyster

Though the threat to its own economy and national security seemed to be the yardstick employed to measure the tariff rate each nation would be levied, was this the fixed, immovable stance of President Trump, the inscrutable Sphinx of the great American plains?

Seems not. Vietnam, Lanka’s closest garment competitor in the US market, did not wait, dragging its feet in Hanoi or staying submerged, as its name means, ‘inside the river,’ fixated with vacillation. The moment Trump had made his world-shattering announcement in early April from the White House lawn and imposed a 46 per cent tariff rate on Vietnamese exports—2 per cent higher than Lanka’s 44 per cent rate—the Vietnamese galvanised into action and its negotiating team was on the next plane to Washington, DC, to engage in tariff talks. And like the early bird getting its worm, Vietnam got its plum that was on the great American pie.

While the Lankan government was asking its US mentor, Julie Chung, what to do next and ploughing the grassroots pradeshiya fields to reap victories at the May elections, the Vietnamese delegation was proactively advocating their tariff brief to top officials in the present Republic administration at the White House.

As a result of such dedicated, perseverant and direct talks done on a face-to-face basis, outlining in detail and explaining their country’s case, and finally cutting a deal with Trump two weeks ago, earned for Vietnam a tariff reduction of 26 per cent that would give their exports an unbeatable advantage, especially in the highly competitive garment trade in the USA.

FINANCE SEC SURIYAPPERUMA : Great win

Reports from experts say that though Lanka enjoyed a reputation for high-quality garments, the enviable position it commanded in the US market has been greatly weakened by the emergence of Vietnam with its ‘strategic location, large workforce, and focus on attracting foreign investment.’ It has enabled it to significantly increase its market share in the US, especially with China’s dominance fast on the wane.

Vietnam’s dynamic action had paid off, whereas Lanka’s laid-back attitude had lost it a greater reduction than the one granted, where a percent more or a percent less in a highly competitive, cut-throat market can mean life or death to the garment industry.

Britain was the first to sign a deal with President Trump, while India is working round the clock to finalise a deal later this year. So is China. While other nations rushed to make deals with Trump, Lanka was nervously twiddling her fingers at home.

Not even on Monday—when Trump had personally signed the first batch of letters to be sent to 14 countries, some of them relatively big fish that his worldwide net had first hauled in, sparing them, if at all, by imposing only a marginally lower tariff rate, and announced to the world that countries on his April 2nd ‘Liberation Day’ hit list would be next to be netted in—did the dull, lull air of complacency that had taken residence in the House take flight from its cosy corner? Nay. It wilfully lingered to lullaby its fellow lodgers to a dreamy, wishful sleep by retelling fairy tales with happy endings.

Even the day after Trump had sent his initial batch of letters to 14 countries, Economic Development Minister Anil Fernando was on Tuesday brimming with joy in Parliament, relieved at the reprieve received from the executioner’s sword in the first round.

Flinging to the winds what tomorrow might bring, Professor Fernando told the House, “The government is confident that Sri Lanka will not face a steep blanket tariff rate, since it has not been listed among the 14 countries that were addressed in letters sent by the United States government on Monday, due to its negotiation talks.”

OPPOSITION LEADER SAJITH: Exports imperiled

The professor added, with a dose of optimism for good measure, “As a result of bilateral talks, countries that have established a relationship on bilateral trade and investment will likely be presented with special rates.”

But who were these brilliant Lankan negotiators who had persuaded Trump’s hard-nut tariff team to make special concessions to Lanka? Ever since Trump announced his reciprocal tariff rates to an astounded world that had scrounged off the US for decades and fattened on its largesse, the Lankan government had seemed in no rush to cut a deal with the US government.

Incidentally, was it some sort of self-created inhibition that made government leaders fear the word ‘deal’ that they shrank back from making or cutting ‘a deal’ with Trump?

While in the current US lexicon, the word ‘deal’ has become the chicest and most fashionably trending hot word, denoting ‘the successful conclusion of negotiations,’ to use in the highest circles of government, in the JVP vernacular that is currently in rage, the word ‘deal’ has been perverted and corrupted and hammered into the nation’s collective conscience to become the symbolic despised word for corruption, as committed by members of all decadent past regimes during their 76 accursed years of rule after independence.

Except for scampering off to seek an audience with ‘past by shelf-life date’ Julie Chung, who is now out of earshot with Trump’s Republican team sweeping into Washington DC and sweeping away USAID and similar Biden relics, a blanket of silence had descended. Apart from such trivial pursuits and glossing over its inadequacies by intermittently parroting ‘successful progress in tariff talks in Washington DC,’ the government has failed to address this critical issue with the seriousness it deserves.

As Harsha de Silva said in a post on X this week, “When I questioned in Parliament as to the current status of the tariff negotiations with the US, Minister Anil Jayantha boasted that Sri Lanka is the only country in Asia negotiating a deal with the US ahead of the July 9 deadline and said major progress and positive results are expected.”

“However,” Harsha further added on X, “President Anura Kumara Dissanayake and his government promised the people that they knew what they were doing and not only that, but they will ensure the stability of the economy but register strong growth. They said a joint statement was to be issued by the two nations, but that turned out to be another tall story like most of their stories. But if they don’t deliver, then what? What is plan B and C? Who is leading the strategy on this? Lies won’t do this time.”

As the Daily FT reported on Thursday, “The Free Trade Zone Manufacturers’ Association this week warned that Sri Lanka’s economy could face a significant blow from the proposed tariffs by US President Donald Trump, leading to a loss of up to 50,000 jobs in the initial phase, and undermine the country’s competitiveness across South and Southeast Asia.”

Opposition Leader Sajith Premadasa said in his X message, “Our ego kept us from seeking every ally, every expert hand and now nearly USD 3 billion in exports hangs in the balance. This is a good case study on how textbook experts are not meant for real-world negotiations.”

He also told Parliament on Thursday, “The government should reach out directly to negotiators at the White House, instead of dealing solely with those at the State Department of Commerce and Trade.” He also rubbed it in by asking the JVP government whether they knew any US senators who could be asked to promote Lanka’s cause at Republican Trump’s White House.

But there’s still hope for a better deal to be done, still hope to pluck yet another feather from the US tortoise and wrest a greater reduction in tariff rates for Sri Lanka’s exports to gain a cutting edge over rivals in America’s ‘big beautiful’ marketplace, the biggest bazaar in the world for apparels.

Trump has not closed the door for talks but kept it ajar for better offers before—as he calls it—the deadline falls on August first. No doubt he will continue to play the game of ‘cutting the deal,’ an art that, he says in his book, ‘The Art of the Deal,’ gives him the most soul-satisfying experience, like a poet would gain from his sonnet, or an artist would gain from his painting, or a musician from his song.

But like a heavy drinker asking for one last drink for the road or a gambling addict, one last throw of the dice, Trump seems unable to quit when the going is good and unable, like a Dickensian Oliver Twist, to stop asking for more.

Even in the July 9th letter to the Lankan President, and, perhaps, stated in the letters he sent to all other world leaders, is the grim threat: “These tariffs may be modified, upward or downward, depending on our relationship with your country.”

The exhilarating game of making deals, which he obviously thoroughly enjoys playing, only ends when he decides to temporarily end it. You can bet your bottom dollar, Trump will ruthlessly use his tariff tool to keep nations heavily dependent on the US market dangling like puppets on his string and dancing to his tune for the remainder of his presidential term.

But none can foretell nor second-guess what Trump will do next, as he strives to make America great again. Iran’s Ayatollah thought he could divine Trump’s intentions and nearly got obliterated from the face of the earth.

Rather than invite such a calamity to fall upon this island, it will be worth it for the sake of Lanka’s exports to seriously consider and accept either one of Trump’s offers as he outlined in his letter on July 9th:

The First Offer: “If you wish to open your heretofore closed trading markets to the United States and eliminate your tariff, non-tariff policies and trade barriers, we will perhaps consider an adjustment to this letter.”

By completely surrendering to this demand, the so far underestimated JVP leaders will truly be able to boast to high heavens of pulling off the remarkable feat of outwitting Trump and wresting from him totally tariff-free entry for Sri Lankan exports to the immensely lucrative US market, and thereby put to shame the Opposition’s so-called economic wizard, Harsha de Silva, and send him crawling back ignominiously to his SJB hole in the opposition’s deadwood.

The Second Offer: “There will be no tariff if Sri Lanka or companies within your country, decide to build or manufacture products within the United States and, in fact, will do everything possible to get approvals quickly, professionally and routinely—in other words, in a matter of week.”

This unprecedented and revolutionary move, a bold, complex step having far-reaching consequences that only the brainiest of minds can fathom and grasp, its economic and socio-environmental impact on humanoids armed with AI techno, is one ideally down Lanka’s Greatest Living Genius, Industries Minister Handunnetti’s street.

He would, no doubt, assiduously examine in detail its gains and hidden pitfalls and present his findings at the World Economic Forum the next time it is held, no matter where it’s held, even in Timbuktu.

His maiden appearance at last month’s World Economic Forum held in China resulted in a storm of interest and left both fellow delegates and audiences alike, who were present on that unforgettable occasion, in no doubt as to the expanse and depth of his knowledge in quantum economics, surrealistically explained in fluent English, though it was one small step for Hadunnetti to express and a giant leap for the others to fully comprehend.

But there was one saving grace for Lanka. If BRIC hadn’t rejected Lanka’s application to join, another ten percent tariff hike would have been added to Lanka’s exports as a fine imposed by Trump on those who dared to challenge the mighty dollar and the power of the United States.

God bless America. God save Lanka!

 

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