Govt. seeks urgent talks with US over 44% tariff on exports

Friday, 4 April 2025 04:04 - - {{hitsCtrl.values.hits}}

Economic Development Deputy Minister Prof. Anil Jayantha Fernando says move is not exclusive to SL, but broader global policy by Trump-administration
Assures Govt. already held discussions, preparing to present its case to US authorities emphasising on economic recovery efforts, its ongoing IMF program
Plans to explore alternative options like EU GSP+ if renegotiation fails

Economic Development Deputy Minister Prof. Anil Jayantha Fernando

The Government yesterday announced plans to urgently negotiate with the US over the steep 44% tariff on Sri Lankan exports under its Reciprocal Tariff Policy, set to take effect on 9 April.

On 2 April US President Donald Trump announced the move which is part of a broader global trade policy introduced by US President Donald Trump which includes a 10% baseline tariff on all imports and higher rates for selected countries. Making a statement, Economic Development Deputy Minister Prof. Anil Jayantha Fernando acknowledged that while the Government was aware of the possibility of increased tariffs, it had waited for the official US policy before formulating a response.

“This move is not something exclusive for Sri Lanka, but a broader trade policy introduced by the US Government,” he pointed out.

Prof. Fernando assured that the Government has already held internal discussions and is preparing to present its case to US authorities, emphasising the country’s economic recovery efforts and its ongoing cooperation with the International Monetary Fund (IMF).

“If the US follows a strict global policy on reciprocal tariffs and we do not have the opportunity to renegotiate the terms, we will explore alternative options,” he added.

The Deputy Minister said one potential strategy involves leveraging the GSP+ preferential tariff system, which provides reduced duties for developing nations exporting to key markets.

“We intend to engage with the US diplomatic discussions immediately to build a long-term trade partnership that benefits both countries,” he stressed.

President Trump’s executive order justified that 44% tariff as a reciprocal measure against what he described as 88% on taxes and trade barriers imposed by Sri Lanka on US goods. However, Prof. Fernando said the accuracy of this figure must be verified through detailed trade analysis. “If a country imports more than it exports, that will create a trade deficit,” Fernando explained. “For example, Sri Lanka exports around $ 3 billion worth of goods to the US while we import only $ 300 million worth of US products. This trade deficit benefits Sri Lanka, and any disruption will have serious economic consequences.”

The US remains Sri Lanka’s largest export destination, accounting for 23% of total merchandise exports. The apparel sector — the backbone of Sri Lanka’s export economy — is expected to be among the hardest hit, alongside food and agricultural products.

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