No order cancellations yet despite US tariffs: Brandix

• Warns of 4Q export pressure 

Hasitha Premaratne  Pic by Pradeep Dilruckshana

Brandix, Sri Lanka’s largest apparel exporter confirmed that US tariffs imposed on imports have not yet triggered order cancellations through September. However, the company warned of potential pressures on export volumes and margins in the final quarter of 2025.

Brandix Managing Director Hasitha Premaratne emphasised that while immediate disruptions are limited, negotiations with U.S. brands over cost-sharing and inflationary risks to consumer demand could impact holiday-season shipments.He shared these remarks joining a panel discussion organised by Sri Lanka – USA Business Council of the Ceylon Chamber of Commerce in Colombo recently.

Premaratne revealed that nearly all U.S. brands partnering with Brandix have initiated talks to share the burden of a 10 percent baseline tariff, with only “one or two” agreeing to absorb the cost without passing it to suppliers. Most brands, he said, have set varying expectations for cost-sharing, prompting Brandix to accelerate operational cost-cutting measures.

“This will surely impact our margins,” he stated, adding that the company has launched “strategic action points” to reduce expenses and offset the financial strain. 

Despite tariff tensions, Premaratne struck an optimistic note on near-term order visibility, confirming no cancellations for shipments through September. He attributed this stability to brands’ reluctance to hastily shift supply chains amid geopolitical unpredictability. However, concerns linger over fourth-quarter demand as U.S. brands reassess inventory levels ahead of key holiday sales events such as Black Friday and Christmas.

“Brands are wary that passing tariff costs to consumers could dampen spending,” he noted, adding that partners are “watching inventories closely” and may trim orders later this year if inflation fears materialise.  Premaratne highlighted longstanding relationships with buyers as a stabilising factor, with brands opting for a “wait-and-see” approach rather than drastic cuts.

“Nobody wants to take harsh decisions now,” he said, emphasising collaboration to navigate uncertainty.  The 90-day tariff pause, which began on April 10, 2025, is scheduled to end on July 9, 2025. Sri Lanka is slapped with a 44 percent reciprocal tariff by Donald Trump’s administration, and negotiations are currently underway.

Premaratne acknowledged that the full impact of tariff negotiations remains fluid. (NF)