Sri Lanka to engage with US on reciprocal tariffs amid economic concerns

Monday, 17 March 2025 04:23 - - {{hitsCtrl.values.hits}}

Foreign Affairs Minister Vijitha Herath

Foreign Affairs Minister Vijitha Herath on Saturday told the Parliament that a Sri Lankan delegation is set to visit the US next month for discussions with its Trade Office regarding the reciprocal tariffs that will take effect from 2 April 2025.

Addressing the House, he stated that the discussions would focus on how Sri Lanka could avoid these tariffs, given the country’s fragile economic situation. The Minister stressed that Sri Lanka cannot afford the burden of additional tariffs on exports and emphasised the need for a diplomatic solution.

The move comes in response to US President Donald Trump’s recent address to Congress, in which he defended his strict tariff policies and announced reciprocal tariffs on several countries, including Canada, Mexico, China, and India. The policy shift is aimed at countering what the US administration perceives as unfair trade imbalances.

The US remains a key trading partner for Sri Lanka, having imported $ 3 billion worth of goods from the island nation last year. Over 70% of these exports came from the garment sector, making the US market critical for Sri Lanka’s economy.

Minister Herath expressed optimism that, given Sri Lanka’s ongoing program with the International Monetary Fund (IMF), the country could secure a tax waiver.

He reiterated that Sri Lanka simply could not withstand the financial strain of increased tariffs.

In addition to the talks with US trade officials, a high-level Sri Lanka business forum will be held in the US next month, bringing together representatives from the Finance Ministry, Foreign Ministry, and business community delegates.

The forum aims to explore economic relief measures and negotiate possible waivers to mitigate the impact of these tariffs.

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