US trade tariff: Sri Lanka must diversify export products and markets - expert
July 11, 2025 02:51 pm
U.S. President Donald Trump’s decision to impose a reciprocal tariff of 30 percent on imports from Sri Lanka will come into effect on August 01, 2025.
President Trump had initially announced on April 2 that a 44 percent tariff would be imposed on Sri Lankan imports, citing an 88 percent trade deficit between the two countries.
However, in a letter sent to his Sri Lankan counterpart on July 10, he confirmed a 14 percent reduction from the previously announced rate, lowering the tariff rate to 30 percent.
Speaking at a special press conference held yesterday (10), Finance Ministry Secretary Dr. Harshana Suriyapperuma and Central Bank Governor Dr. Nandalal Weerasinghe stated that discussions are ongoing to reduce further the tariff rate imposed by the United States.
In addition to the newly imposed 30 percent reciprocal tariff, the existing 10 percent tariff will also remain in effect, effectively resulting in a total tariff rate of 40 percent on Sri Lankan exports to the United States.
This development raises significant concerns regarding the impact on Sri Lanka’s export sector.
Commenting on the issue, Umesh Moramudali, a lecturer in the Department of Economics at the University of Colombo, emphasised the need for Sri Lanka to diversify its export products and export markets.
“In terms of apparel exports, we are competing with countries such as Vietnam, Bangladesh, and some African nations, where wage levels are lower than in Sri Lanka. In some cases, if we compare our price increases to those of Bangladesh, the relative price reduction they can offer is much greater than that of products manufactured in Sri Lanka. Therefore, Sri Lanka must diversify both its export products and the countries to which it exports,” he said.
