As was reported in the Sri Lanka Financial Times, the Sri Lanka gem and jewellery industry has urged the government to resolve the crisis arising from the proposed high reciprocal tariff by US President Donald Trump via dialogue.
“The proposed imposition of a reciprocal tariff by the US stands to significantly disrupt Sri Lanka’s gem and jewellery sector—one of the most historically significant and economically vital industries in the country. We are seriously concerned about the impact,” industry sources said.
Currently, approximately 10% of gemstones entering the US originate from Sri Lanka, whether directly exported or re-exported through intermediary countries such as Thailand, Hong Kong, Dubai, and Switzerland. The longstanding trade ties between Sri Lanka and the US in this sector have fostered mutual economic benefits, promoting entrepreneurship, employment, and cross-cultural appreciation of craftsmanship and heritage.
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“The current policy uncertainty is already affecting business,” says Altaf Iqbal, Managing Director of Regal Gems Ltd., & BOM member of the Sri Lanka Gem & Jewellery Association (SLGJA). “While the proposed duty now stands at 10%, it’s important to note that the initial figure was 46% — a rate that would have devastated gem exports to the U.S. even more severely. Sri Lanka’s gem and jewellery industry, which directly and indirectly supports over 600,000 workers, is only just beginning to recover from a deep debt crisis. We’ve actively lobbied our government to ensure this sector is included in ongoing trade negotiations. However, coordinated lobbying from American traders and organizations such as AGTA will carry significantly more weight and could be pivotal in influencing the U.S. administration’s final decision.”
Daily FT LK – Sri Lanka Financial Times
Friday, 2 May 2025
Sources said the proposed reciprocal tariff threatens to severely undermine these positive outcomes. Increased duties on Sri Lankan gems and jewellery would make these products less competitive in the US market, resulting in diminished exports, loss of critical income for small and medium-sized businesses, and ultimately, significant job losses across the value chain. This could have devastating social and economic consequences for families who are already vulnerable due to global market fluctuations and post-pandemic recovery challenges.
Moreover, such a tariff risks damaging a time-honoured bilateral trade relationship built on trust, quality, and mutual advantage. Sources said the industry firmly believes that the continuation of duty-free or preferential access to the US market for Sri Lankan gems and jewellery is essential—not only to sustain local livelihoods but also to maintain the high quality and diversity that American consumers have come to expect from its products.
The industry also said Sri Lanka has long been recognised as a global hub for high-quality gemstones, with a reputation that dates back centuries. Today, the industry remains a cornerstone of the national economy, directly and indirectly supporting the livelihoods of over 600,000 individuals. This includes not only miners and gem cutters but also traders, exporters, jewellery manufacturers, designers, and their families, who rely on this ecosystem for economic sustenance.
In view of the serious impact, the gem and jewellery industry is urging the Government to initiate constructive dialogue with the US Government and relevant trade bodies.
The industry wants the Government to advocate for the reconsideration and permanent removal of the proposed tariff. “Preserving this crucial trade channel will not only safeguard thousands of Sri Lankan jobs but also reinforce the principles of fair trade and international cooperation,” sources emphasised.
Tap here to read the original post in the Sri Lankan Financial Times
