Sri Lanka Seeks further Relief as U.S. Slaps 30 percent Tariff on Exports
- CNL Reporter
- July 11, 2025
- Political
- Exports
- 0 Comments
News of the Day
Sri Lanka has pledged to engage the United States with “an open mind and genuine intentions” to further reduce a newly imposed 30 percent reciprocal tariff on its exports, as officials warn of serious repercussions for the country’s garment industry — its top foreign exchange earner.
U.S. President Donald Trump, under a fresh round of trade actions, has officially informed President Anura Kumara Dissanayake of the tariff hike, though it represents a reduction from the original 44 percent initially proposed.
Treasury Secretary Harshana Suriyapperuma told reporters on Thursday that despite the heavy blow, Sri Lanka is committed to continued dialogue with Washington. “We received one of the largest reductions among the affected countries. But we will continue negotiations,” he said at a special media briefing.
Central Bank Governor Dr. Nandalal Weerasinghe added that the revised rate gives Sri Lanka a slightly improved position compared to regional competitors. “While we were previously burdened with 44percent , we now face 30 percent , which is comparatively better than what countries like Laos, Myanmar, Cambodia, and Indonesia are facing — where tariffs range between 31 and 40percent ” he noted.
However, local economists remain deeply concerned. Professor Priyanga Dunusinghe of the University of Colombo’s Department of Economics warned that the tariff revision would still inflict severe damage on Sri Lanka’s export sector, especially as key rivals such as Vietnam continue to enjoy preferential access to the U.S. market.
“The U.S. market is struggling with inflation and rising prices,” he said adding that higher tariffs on Sri Lankan goods specially readymade garments will go up in prices compelling American consumers to buy apparel made in competitor countries.”
Sri Lanka exports could come down to around 3 percent of GDP as a result of weakening external demand and trade deviation. According to the International Monetary Fund (IMF),
Apparel manufacturers, already operating at less profit margins, would have to shut down local factories or shift to start production overseas.
Unemployment would surge. Public pressure on the government to deliver support may slow down reform implementation and increase the risk of program underperformance, it added. .
Elevated uncertainty and downside risks linked to significant global trade shocks also pose risks to the program. If downside risks materialize, achieving program targets would be more challenging IMF warned.
