Sri Lanka’s solid tyre dominance threatened by Trump tariffs

Sri Lanka, a global leader in solid tyre manufacturing, faces a critical challenge to its market leadership as a 30 percent US import tariff on Sri Lankan rubber goods is set to take effect on August 1, 2025. 

The Colombo Rubber Traders’ Association (CRTA) has issued a dire warning of industry-wide fallout, emphasising the severe threat to the nation’s US $ 1 billion rubber export revenue and the livelihoods of over 150,000 rural families.

While the tariff has been reduced from an initial 44 percent to 30 percent, CRTA Chairman Harin de Silva stated that while the reduction from 44 percent to 30 percent may have averted complete exclusion from the US market, it in no way constitutes a competitive or sustainable solution for our exporters.

Sri Lanka currently holds a significant share of the global solid tyre market, with some estimates putting it as high as 36 percent. However, this leadership position is now at risk. The tariff renders Sri Lankan solid tyres, along with medical and industrial gloves, significantly less competitive compared to the regional rivals. Countries such as Vietnam and India reportedly face lower tariffs of 20-25 percent and around 25 percent, respectively, a disparity that is expected to prompt buyers to shift their sourcing away from Sri Lanka. “This isn’t just a trade issue—it’s a national economic emergency,” de Silva stressed. 

He warned that without “swift and strategic diplomatic engagement by the government”, Sri Lanka risks a permanent erosion of its US market share, the collapse of rural incomes and a chilling effect on foreign investment.

The US accounts for nearly one-third of Sri Lanka’s rubber export revenue, making the tariff’s impact disproportionately significant.

The CRTA highlights that the new 30 percent duty will immediately cripple downstream manufacturers and thousands of smallholder rubber growers already operating on razor-thin margins, due to the escalating input costs, high domestic taxes and outdated infrastructure.

“Rubber exports underpin the economic survival of over 150,000 rural Sri Lankan families and this duty places their future in jeopardy,” de Silva emphasised.

The CRTA has urgently called upon the Sri Lankan government to initiate high-level negotiations with the US trade authorities to secure tariff parity with regional competitors, establish a transparent and time-bound roadmap for trade dialogue, ensuring active involvement from industry stakeholders and accelerate structural reforms to enhance export competitiveness and alleviate production bottlenecks within the rubber sector.

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