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US reciprocal tax will create political upheavals, will end globalisation: RW
Colombo, April 9 (Daily Mirror) - Highlighting that there is a strong possibility of political upheavals due to the deteriorating economic situation brought on by the US reciprocal tax and that it will end globalisation, former President Ranil Wickremesinghe said the government should take several remedial actions.
“The U.S’ so-called 'reciprocal' tariff and China’s retaliatory tariff on the U.S. have started a trade war. It brings to an end globalisation and the WTO rules supporting it. It will now lead to an uncertain period of the major economic powers, either challenging each other and/or cooperating with them. In this breakdown of the present world order, the worst affected will be small countries like Sri Lanka with economies on the export of one or two commodities, with the US being a major market. Even after negotiations the tariffs will not return to pre-April 2nd levels. This will bring about a disruption in Sri Lanka’s exports, resulting in factory closures and large scale lay-offs, which may according to the industry even be about 100,000. Similarly, the widening trade deficits will bring about a current account deficit. With the overall external trade being affected, the government will not be able to achieve the revenue estimated from duties and excise,” Wickremesinghe said in a statement.
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