-By LeN Economic Correspondent
(Lanka-e-News -12.April.2025, 9.45 PM) In a remarkable fusion of international legal strategy and trade diplomacy, a Sri Lankan lobby group based in London has joined forces with a coalition of liberal senators, American business lobbies, and civil liberties organizations in the United States to challenge the continuation of tariffs imposed on Sri Lankan exports by U.S. President Donald Trump. At the center of the legal battle is the controversial use—and alleged abuse—of the International Emergency Economic Powers Act (IEEPA), a Cold War-era statute that critics claim was never intended to be wielded as a trade war cudgel against developing economies like Sri Lanka.
The London-based Sri Lankan lobby, representing a transnational network of apparel manufacturers and trade consultants, is currently working alongside several influential American groups, including the New Civil Liberties Alliance (NCLA), which has already filed lawsuits against Trump’s use of the IEEPA to justify tariffs on Chinese goods. The Sri Lankan lobby is exploring intervention options or even initiating a separate suit, arguing that the IEEPA’s scope does not legally encompass tariff actions that lack a genuine “national emergency” basis.
At the heart of the Sri Lankan concern is the apparel industry—a $5 billion lifeline for the country’s fragile post-COVID, post-default economy. Under a range of trade preference schemes, Sri Lanka previously enjoyed near duty-free access to the U.S. market, particularly under the Generalized System of Preferences (GSP). However, the Trump administration’s sweeping use of the IEEPA led to tariff increases as high as 44% on some textile and apparel products, devastating exporters who relied on predictable access to American retailers.
“These tariffs have done irreparable harm to small and medium-sized apparel manufacturers in Sri Lanka,” says Nishan Perera, a legal advisor to the Sri Lankan Lobby Group in London. “The sudden imposition, without public consultation or economic justification, is a clear abuse of a law meant to counter terrorism or national security threats—not to undermine trade partnerships with developing democracies.”
According to Perera, the group has held preliminary consultations with international trade law experts, including former legal officers at the World Trade Organization (WTO), and is considering filing an amicus brief or direct litigation alongside U.S. partners.
Originally enacted in 1977, the IEEPA gives the U.S. President broad powers to regulate commerce after declaring a national emergency in response to any unusual or extraordinary threat to the United States that has a foreign source. It was never envisioned as a tool for trade wars or punitive economic nationalism.
“The IEEPA was designed for real emergencies—hostile regimes, terrorism, cyberattacks—not to target friendly trade partners like Sri Lanka,” says Professor Martha Ellison, a trade law expert at Georgetown University. “Trump’s expansive interpretation of the Act essentially turned every trade disagreement into a national security issue, setting a dangerous precedent.”
In 2022, the NCLA filed a legal suit on behalf of Simplified, a Florida-based home goods company that imports heavily from China. Their case argues that the tariffs are illegal because they fall outside the intended use of the IEEPA and usurp Congressional authority over international trade. The Sri Lankan lobby now seeks to extend that argument, making a broader point: if the United States can designate a peaceful, trade-reliant country like Sri Lanka as a national security risk, then no country is safe from arbitrary economic retaliation.
In a surprising development, four prominent Republican senators—Mitch McConnell, Rand Paul, Susan Collins, and Lisa Murkowski—have thrown their support behind a Democratic amendment to reverse a similar set of tariffs imposed on Canada, citing economic harm and diplomatic fallout. Their vote last week to support the amendment is viewed as a potential turning point.
“The abuse of executive powers under the IEEPA must be curtailed. We cannot allow trade policy to be dictated by whims and war cries,” said Senator Rand Paul during a floor speech. “Canada, China, Sri Lanka—it doesn’t matter. If Congress does not reassert its authority, we risk becoming a government of one.”
This emerging bipartisan alliance could prove critical if legal efforts fail, signaling that legislative reforms to limit executive power in trade matters may soon follow.
Fueling the legal fire is a constellation of ideologically diverse actors. The New Civil Liberties Alliance, a libertarian legal group with past backing from industrialist Charles Koch and legal strategist Leonard Leo, has taken the lead on the American side. Though Stand Together—a Koch-affiliated nonprofit—claims no involvement in the specific case, its financial support of the NCLA has been instrumental in building legal capacity to challenge Trump-era trade policies.
Leo, known for his role in cementing a 6-3 conservative majority in the U.S. Supreme Court, has remained silent on the tariff lawsuits. Still, observers note that his fingerprints—along with Koch’s free-market ethos—are visible in the NCLA’s aggressive litigation strategy.
“Sri Lanka’s interest here aligns with that of American consumers, small businesses, and constitutional conservatives,” argues Damien Rockford, a legal strategist involved in the campaign. “It’s a rare example of global interests intersecting with the U.S. constitutional order.”
Sri Lanka’s inclusion in this growing legal rebellion holds symbolic weight. As a developing country with a decades-long history of trade cooperation with the U.S., it represents the very type of economy that the post-war liberal order aimed to uplift through free trade. Targeting such nations with emergency tariffs not only damages bilateral relationships but also risks hollowing out global trade norms.
“What’s at stake isn’t just Sri Lankan exports,” says Dr. Anjali Coomaraswamy, an economist at the London School of Economics. “It’s the principle of mutual respect in trade. If GSP beneficiary countries can be summarily punished without due process or diplomacy, the entire system of preferential access is under threat.”
Coomaraswamy warns that countries like Bangladesh, Vietnam, and even Kenya are closely watching the Sri Lankan case, viewing it as a bellwether for how far executive overreach in Washington can stretch before being curtailed.
While the primary battleground is in U.S. courts, there are signs that the Sri Lankan government, though not officially involved in the legal action, is preparing to explore options at the WTO. Filing a dispute over the tariff increases could reopen debates about the U.S.’s compliance with multilateral trade agreements.
However, legal experts caution that the WTO’s Appellate Body has been effectively paralyzed since 2019 due to U.S. refusal to confirm new judges. This impasse has turned many to domestic courts and political alliances instead of traditional dispute settlement mechanisms.
“There’s no silver bullet here,” says Perera. “But a coordinated legal, diplomatic, and political campaign can help restore fairness.”
For the Sri Lankan lobby in London, the campaign is not without risk. Aligning with American legal groups that have opposed Trump’s policies in court could be interpreted as a partisan act—particularly if Trump secures a second term in the upcoming 2024 election.
Still, others see it as a necessary act of self-preservation.
“We’re not picking sides in U.S. politics,” insists Perera. “We’re defending Sri Lankan livelihoods, democratic trade norms, and the rule of law.”
That message may resonate across ideological divides. After all, trade wars rarely produce winners—and developing nations like Sri Lanka almost always lose the most.
The Sri Lankan challenge, still in its formative stages, could become a landmark case in the effort to rein in executive power and restore balance to global trade. It’s a fight that pits a small island nation’s textile workers against the machinery of American presidential power—but one that could reshape the rules for everyone.
As legal briefs are drafted, alliances are brokered, and senators recalculate their positions, one thing is clear: Sri Lanka is no longer a passive observer of international trade turbulence. With its lobbyists, lawyers, and partners, it is becoming an active voice in the global struggle to preserve the integrity of economic cooperation in the face of nationalist disruption.
And in an age where fabric may yet speak louder than steel, the humble apparel exporter from Colombo may soon have their day in court.
-By LeN Economic Correspondent
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by (2025-04-12 16:15:46)
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