📈 Stricter US Traceability Rules Lift Compliance Burden on Sri Lankan Apparel

The US Customs and Border Protection (CBP) has issued strict new guidance under the Uyghur Forced Labour Prevention Act (UFLPA). This requires comprehensive raw-material-to-product documentation for entering the US market, impacting local exporters. • New Compliance Demands: Simple supplier declarations are no longer sufficient. Importers must track the entire supply chain—including cotton origin, yarn production, fabric manufacturing, and garment assembly—using commercial records like purchase orders, production data, and potentially isotopic testing. • Dual Trade Pressures: This development arrives alongside a separate USTR proposal to place Sri Lanka under a higher 12.5% duty regime following a Section 301 investigation into forced labour import policies. • Macro Context & Impact: • Apparel & textiles is Sri Lanka’s top export earner, accounting for nearly 40% of merchandise earnings and bringing in over US$ 4 Bn annually. • The US is Sri Lanka's largest single market (22% of total merchandise exports). • April 2026 exports to the US fell 3.15% YoY to US$ 196.37 Mn, while cumulative Jan-Apr 2026 exports dipped 2.09% YoY to US$ 945.76 Mn. Market access to Sri Lanka's primary export destination will now heavily rely on local manufacturers' ability to maintain meticulous, verifiable end-to-end supply chain transparency.