Ranil warns of job losses and economic crisis due to new U.S. tax policy

Former Sri Lankan President Ranil Wickremesinghe has warned that the new U.S. tax policy, particularly the implementation of reciprocal taxes, poses a serious threat to Sri Lanka’s economy.

He cautioned that it could lead to the loss of over one hundred thousand jobs and place additional strain on the country’s financial stability.

Making a special statement today (April 16), Wickremesinghe said the government must treat this as an emergency and immediately inform the public of the steps it intends to take in response. He emphasized that Sri Lanka’s exports are at risk, even if the reciprocal tax rate is reduced to 25 percent, and noted that the country will still experience a decline in export income.

“As tariffs increase, the number of consumers purchasing goods decreases. We have to face that problem. This cannot be stopped; it will be implemented,” Wickremesinghe said. “One of its impacts is job losses. Many say the number could reach one hundred thousand. Even if it is less than that, the figure will still be significant.”

He further warned that the consequences will extend beyond those directly employed in export industries. “It will also affect others connected to it, such as people renting out boarding rooms and small shop owners. Everyone’s income will take a hit. Our economy will also be affected. There will be added pressure on our balance of payments. The amount of money we receive will decrease. As a result, the amount we need to borrow will increase.”

Wickremesinghe stressed that due to this looming crisis, the Sri Lankan rupee has already depreciated and the country’s economic growth may slow down. He also highlighted that Sri Lanka must begin generating funds to start settling its debts by 2028, in accordance with the ongoing debt restructuring program.

“Sri Lanka faces many problems. That is why one aspect is to discuss the issue with the United States, and the other is to consider how we will address it domestically,” he added. “The government must come out with a clear plan to face this situation. Otherwise, if there is no communication, various problems will arise.”

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