Sri Lanka’s seafood export industry—an emerging economic engine poised for global expansion—is now swimming against a powerful current. U.S. President Donald Trump’s new tariffs, once thought to target only China or large-scale garment exporters, have landed squarely on Sri Lanka’s fishing sector, threatening jobs, investments, and a carefully laid path to international markets.
While sectors like rubber, coconut, cinnamon-based products, and electronics are feeling the pinch, the hardest blow may be to fish and seafood exports. Until now, Sri Lanka has enjoyed duty-free access to the lucrative U.S. market. But the sudden imposition of tariffs, up to 30% has upended that advantage. For a sector that exported $260 million worth of fish in 2024, with ambitions to more than double that figure to $650 million by 2028, the new duties are a serious wake-up call.
“If these tariffs remain, we simply won’t reach our targets,” says Dilan Fernando, President of the Marine Fish Exporters Association.
The numbers make the picture clear. Of the expected $650 million expansion, $350 million was earmarked for the American market alone. Now, exporters fear being priced out entirely. With other nations like Vietnam and India enjoying favorable trade terms or government support, Sri Lanka finds itself at a competitive disadvantage.
“Our production costs are already high. If we’re taxed more than others, we can’t compete,” Fernando explains.
Rising Costs, Shrinking Margins
Fish exporters now face an impossible equation: absorb the 30% tax or slash prices to stay relevant in the U.S. market. If exporters reduce the price they pay local fishermen—potentially down to Rs. 800 per kilo—those at sea may no longer be able to make a living.
“If it becomes unprofitable to sell at that rate, fishermen will simply stop fishing,’ Fernando warns.
The problem runs deeper than tariffs. Exporters must navigate an outdated approval system involving multiple government agencies. Cold storage on fishing vessels is insufficient. Nearly 40% of the tuna hauled from distant waters is wasted before it ever hits shore. Sri Lanka’s boat technology lags far behind global standards.
“Our multi-day boats cannot preserve fish to export standards over long distances,” Fernando laments. “We’re asking the government to reduce this loss.”
Global Competition and Missed Opportunities
The U.S. remains the largest market for frozen fish, particularly high-value species like tuna, shrimp, and crab. Vietnam, by contrast, exports over $11 billion worth of seafood, thanks to efficient infrastructure, aggressive trade deals, and state-backed incentives.
“In Vietnam and India, exporters receive duty rebates of up to 8%. That rebate goes straight back to the fisherman. In Sri Lanka, we get none of that,” Fernando says.
“In Vietnam and India, exporters receive duty rebates of up to 8%. That rebate goes straight back to the fisherman. In Sri Lanka, we get none of that,” Fernando says.
The island has over 100 factories in the seafood sector. Around 85% of exports are fresh fish, while only 15% mostly frozen crab and shrimp, go to countries like the U.S. Yet, Sri Lanka could become a regional seafood processing hub if reforms were implemented and energy costs reduced.
“There’s an opportunity here, even within this crisis,” Fernando adds. “Trump’s tariff shock could push us to innovate and capture market share if the government plays its part.”
Challenges in the North and East
The northern districts of Jaffna and Mannar, famed for their rich crab and shellfish resources, face an even more precarious future. Many local fishermen operate in waters threatened by Indian trawlers, which violate Sri Lanka’s maritime boundaries daily.
“Our people can only fish a few days a month because Indian boats enter three times a day,” Fernando explains.
The lack of enforcement, combined with inadequate support for modern boats or cold storage, makes the sector volatile and unattractive to investors. Building a high-quality tuna boat with modern equipment can cost up to Rs. 30 million—a cost out of reach for most fishers without a functional loan system or subsidies.
“We have told the government: fishermen are ready to invest if the support exists,” says Ruwan Fernando, Secretary of the Multipurpose Fishing Vessel Owners’ Association.
Currently, Sri Lanka has over 6,000 multipurpose fishing vessels, but only 3,500 are formally registered. Around 2,000 boats catch tuna specifically for export, generating nearly $300 million annually. However, with international competition and tariffs rising, the sustainability of this income is in doubt.
A Call for Reform, Not Rhetoric
National People’s Power (NPP) MP Abubakar Adambawa of the Digamadulla District sees a systemic failure in how past governments handled the fisheries sector. He claims years of mismanagement, corruption, and ignorance of international market dynamics have left the industry underdeveloped.
“Despite its potential, the sector remains ignored due to outdated policies and a lack of vision,” he told Irida Mawbima. Now is the time for practical solutions, not political slogans.”
The current government has received detailed proposals from exporters and industry leaders. These include simplifying export approvals, subsidizing energy and fuel, investing in modern boat technology, and creating a duty rebate scheme similar to those in India and Vietnam.
Value-Added Vision
Sri Lanka’s seafood has a unique edge in flavour and freshness. Jaffna’s crabs are globally renowned, boosted by success stories like the Ministry of Crab, an international brand built by former cricketer Mahela Jayawardena.
“This shows what’s possible with vision, investment, and quality,” says Fernando. “We need 10 more ‘Ministries of Crab’, not just one.”
But for that to happen, Sri Lanka must act swiftly. The Trump tariffs are more than just a policy change; they’re a stress test for Sri Lanka’s entire export apparatus. Whether the nation sinks or swims may depend on the decisions made today.
Written based on an article written by Sachithra Perera for Sunday Mawbima
