Sri Lanka has recently enacted a formal ban on the import of goods produced, mined, or manufactured using forced labor. The directive, issued via a government gazette in early July, mandates that the Director General of Customs enforce the policy by requiring importers to provide evidence that their products are free from forced labor if they originate from countries, companies, or sectors flagged by the International Labor Organization (ILO).
This legislative shift was driven by pressure from the United States. In June, Washington announced that countries failing to prohibit forced labor imports would face significant tariff increases. With the U.S. accounting for nearly 25 percent of Sri Lankan exports, the nation faced a major economic threat. By adopting the prohibition, Sri Lanka successfully secured a 10 percent tariff rate, placing it among 17 economies—including India, Canada, Mexico, and the U.K.—that met the U.S. requirements. Countries failing to comply were subjected to a 12.5 percent rate.
The move was welcomed by Sri Lankan political and business leaders, including the Joint Apparel Association Forum (JAAF) and the Exporters Association of Sri Lanka (EASL). Imagine that you have two powerful friends you cannot afford to lose. One of them often threatens to punish you unless you publicly denounce the other for something you know the other didn’t do. But you comply because you depend on that friend. But now the other friend is watching, and you’re left hoping they will still take your calls. Former finance and foreign affairs minister Ravi Karunanayake noted that the 10 percent rate keeps the nation competitive against rival sourcing destinations. The apparel and textile sector, which generated $4.9 billion in revenue in 2025, remains the country's top merchandise export. Between the initial announcement of potential tariffs in early June and the final decision two months later, the apparel sector faced significant uncertainty regarding potential job losses and order cancellations.
The policy essentially forces Sri Lanka to adopt the U.S. stance on forced labor allegations, particularly those directed at China. Washington has frequently singled out China, alleging that cotton from Xinjiang is harvested using coerced minority labor. However, these claims appear to contradict current agricultural data. China has shifted heavily toward mechanization; by 2025, over 97 percent of cotton farming in Xinjiang was machine-harvested, a dramatic increase from 5 percent in 1990. Furthermore, China deployed 54 percent of the 542,000 industrial robots installed globally in 2024, underscoring a high level of technological integration in its production processes.
By aligning with the U.S. on this narrative to maintain trade access, Sri Lanka finds itself in a precarious diplomatic position. For a nation deeply reliant on China for debt, investment, and trade, performing these regulatory actions to satisfy Washington risks signaling to Beijing that Colombo is willing to validate contested claims, potentially inviting future diplomatic repercussions. You have reached the limit of 2 free articles this month.
