
‘Import American vehicles duty-free’ U.S. tells Sri Lanka
- CNL Reporter
- August 5, 2025
- News, Political
- American vehicles
- 0 Comments
The United States (U.S.), in its tariff negotiations, requested Sri Lanka to grant duty-free access to American vehicles, including Electric Vehicles (EVs), in its bid to narrow the trade gap, a source familiar with trade talks said.
However, according to the same source, the Sri Lankan government did not grant outright approval, but agreed to consider such concerns in a phased out manner over a period of time. Sri Lanka and the U.S. will continue with the trade dialogue with the aim of getting tariffs reduced further.
During the latest round of talks, Sri Lanka managed to get tariffs reduced to 20 per cent from the originally proposed amount of 44 per cent. The current rate is considered competitive since it is on par with its regional competitors, such as Bangladesh and Vietnam. Tariffs imposed on Vietnam and Bangladesh also remain at 20 per cent.
U.S. total goods trade with Sri Lanka was an estimated $3.4 billion in 2024. U.S. goods exports to Sri Lanka in 2024 were $368.2 million, up 4.9 per cent ($17.1 million) from 2023. U.S. goods imports from Sri Lanka totalled $3.0 billion in 2024, up 6.1 per cent ($173.5 million) from 2023. The U.S. goods trade deficit with Sri Lanka was $2.6 billion in 2024, a 6.3 per cent increase ($156.4 million) over 2023.
Sri Lanka has offered to purchase fuel from U.S. companies if prices are competitive, as one of its proposals to reduce the trade gap. The Ceylon Petroleum Corporation (CPC) has already sought samples of WTC crude produced in the U.S. for a specification test in Sri Lanka.
Currently, apparels remain the largest Sri Lankan products to reach the U.S. market. Sri Lanka stood firm against the request by them to impose restrictions on imports of raw materials from China for the garments industry. In the future, Sri Lanka will have to navigate further intricacies in international trading. China and the U.S. are the leading EV manufacturers in the world. Currently, Sri Lanka imports EVs such as BYD from China.