“Upsetting the Apple-cart”
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This is what US President Donald Trump has done; sent world trade into an uneasy spin with his across-the-board tariffs and sucking countries, desperate to ship their goods to the US, into a vortex of uncertainty. How these new taxes will play out in a post-Trump era also remains to be seen.But enough of that at the moment and more on it later, I told myself as I watched Aldoris, the choon-paan karaya, reach our gate to be greeted by the trio. What pleasantly surprised me was that he was playing an old baila favourite, ‘Biwwa neda wada kaha sudiya’ on his gaily-decorated tuk-tuk.
This is how the first verse of that song goes: “Biwwa neda wada kaha sudiya//Biwwa neda wada kaha sudiya//Aney magey emali paney//Kiyannako aththa aney//Biwwa neda wada kaha sudiya” and loosely translated it means: “You drank the wada-kaha (calamus, a common medicinal herb) potion//You drank the wada-kaha potion//Oh my Emily, my life//Tell me the truth)//You drank the wada-kaha potion.”
I am a lover of baila songs and just couldn’t resist sharing the meaning with readers. But let’s hear what the trio has to say in their interaction with Aldoris.
“Oyata yaluwo hari nedeyo innawada angalum karmantha wala weda karana (Do you have friends or relatives working in garment factories)?” asked Kussi Amma Sera. “Godak kattiya innawa. Samahara gam wala, eka thama thiyena ekama rassawa (There are many people. In some villages this is the only job available),” replied Aldoris.
“Loku bayak thiyenawa godak rassawal nethiwewi kiyala mae americawa ekka thiyena prashney hinda (There is a fear that many jobs might be lost because of a problem with the US),” said Serapina. “Prashney thama loku badu apey pita-rata arina angalum walata (The problem is high taxes on our garment exports),” noted Mabel Rasthiyadu. “Aanduwata mokakda karanna puluwan prashney adu karanna (I wonder what the government can do to minimise the problem)?” asked Aldoris. “Hithata harima barak mokada godak apey gam wala inna aya angalum karmantha wala-ney weda karanney (This is very worrying as hundreds of villagers are employed by garment factories),” added Kussi Amma Sera.
As I fetched my first mug of tea from the kitchen and moved to the computer in another room, the home phone rang. It was Arthika, my nonsensical economist friend also known as good-for-nothing Somey. “I say……these increased tariffs by the US are a big blow, in particular, to our garments exports,” he said. “Well one cannot find fault with the US as the trade balance is heavily in Sri Lanka’s favour (Sri Lanka exported goods to the US worth $3.4 billion in 2024, while our imports from there were only $368.2 million),” I said.
“Yes, but the US is a big country and we are small fry. We need to offer something better to the US to bring some equality in trade terms,” he said. “With the US reducing the tariff to 30 per cent from 44 per cent earlier, this is some relief. But what I cannot understand is why Sri Lanka is secretive in what we have offered to the US in return for reducing the tariff rates,” I said.
“If Sri Lanka is seeking a further reduction from 30 per cent, Sri Lanka has to offer more concessions. What are these concessions? Why can’t the government be more transparent,” he asked. “Vietnam and Thailand have offered zero import taxes to the US. Indonesia has also offered zero duties, while its tax rate by the US has reduced to 19 per cent,” I said.
The government, which has been secretive about what is being offered to the US to reduce the tax burden on Sri Lankan industries, was sending another delegation to the US on Friday for further discussions. Among the worst affected sectors for Sri Lanka are garments, tea and rubber exports. Under the 30 per cent tax regime, the taxes on garments eventually would range from 30 per cent to 60+ per cent, because the 30 per cent tariff would be added to the existing tariffs. For example garments are currently taxed at a range of 2 -32 per cent and an additional 30 per cent would result in tariffs going up to over 60 per cent for some garment categories. Tea which enjoyed zero duty into the US now has been slapped with 30 per cent.
Harin de Silva, Chairman of the Colombo Rubber Traders’ Association (CRTA) says the new tariff poses a grave threat to Sri Lanka’s rubber exports, especially to value-added segments such as solid tyres, gloves and industrial components. The US is a critical export destination, accounting for nearly one-third of Sri Lanka’s $1 billion rubber export revenue in 2024.
The CRTA says that the 30 per cent tariff will immediately and disproportionately impact downstream manufacturers and thousands of smallholder rubber growers who already operate under narrow margins due to rising input costs, high domestic taxes and outdated infrastructure. “This isn’t just a trade issue – it’s a national economic emergency,” Mr. de Silva emphasised. “Without swift and strategic diplomatic engagement by the Government, Sri Lanka risks permanent erosion of its US market share, the collapse of rural incomes and a chilling effect on foreign investment.”
In an article titled ‘What happens next to Globalisation?’ appearing in the Project Syndicate news platform, writer Zia Qureshi says that despite the hand wringing about US President Donald Trump’s tariff war, which many claim sounds the death knell for the world’s trading system, and worries about heightened geopolitical tensions, globalisation is not ending. But it is being fundamentally restructured by geopolitical shifts, technological transformation and climate change. And each of these forces will affect globalisation in different ways.
“For starters, the rise of China and other economies is bringing an end to the postwar world order dominated by the US. Escalating strategic rivalries, coupled with populist politics, have ushered in an era of economic nationalism, upending old paradigms and fueling trade tensions. Economies that used to preach the neoliberal gospel of free markets and openness have embraced nationalist industrial policies, protectionism and discriminatory trade practices. This shift is most apparent in the US, formerly the chief exponent of neoliberalism and the de facto guarantor of the multilateral system,” Qureshi said.
The government has also been unclear about the level of taxes imposed (currently) on US goods to Sri Lanka. The US President said it was 88 per cent (hence the crippling 44 per cent tax first imposed in April), but a Sri Lankan official during a recent media conference in Colombo said that was not correct. So far, the actual amount of taxes imposed on US goods remains a secret.
Kussi Amma Sera brought me my second mug of tea and exclaimed: “Aiyo…….magey balaporoththuwa apey kattiyata angalum karmanthawala rassawal nethi nowei kiyala (Aiyo…….I hope our people won’t lose their jobs in garment factories).” I nodded in agreement and wished that the government would be more transparent, like other countries, in explaining the trade-off in taxes. The people have a right to know what is being negotiated.
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