Discussions held with US authorities aimed at reducing the higher reciprocal tariff rate announced by US President Donald Trump have not been successful thus far, Minister of Industry and Entrepreneurship Development Sunil Handunneththi has acknowledged.
Although several discussions were held with US authorities, Sri Lanka has been unsuccessful in striking a deal to reduce the reciprocal tariffs announced by the US President, Minister Handunneththi conceded.
According to the announcement made by US President Trump, an additional 30% tariff will be imposed on Sri Lankan exports entering the US market from tomorrow (Aug 1).
The Minister said they are still hopeful of a better deal pertaining to tariffs, although it takes effect from tomorrow.
A virtual discussion was also held last week between President Anura Kumara Dissanayake and U.S. Trade Representative (USTR) Jamieson Greer regarding the further reduction of trade tariffs imposed by the United States on Sri Lankan exports.
The primary objective of the virtual meeting was to discuss the further reduction of proposed trade tariffs on Sri Lankan exports and to further strengthen trade and investment relations between the two nations.
The Secretary to the Ministry of Finance, Dr. Harshana Suriyapperuma, along with senior officials from the Office of the United States Trade Representative, also participated in the discussion.
Meanwhile, according to economist Dhananath Fernando, the reduction in US reciprocal tariff on exports from Sri Lanka to 30% from previously announced 44% is positive news for local businesses, considering the rates imposed on the country’s competitors. He said however the rate is a substantial increase from the existing 10% duty.
Fernando noted with the increase in the tariff rate, the consumer spending in the US will see a notable drop which will result in the reduction in demand for imported products.
Therefore, the new tariff will reduce the export volume of Sri Lanka which has also been highlighted by the World Bank in a recent report, economist Dhananath Fernando said.
According to Fernando, the real challenge Sri Lanka faces is the tariff imposed by the US on its competitors such as India, Vietnam, Thailand, Indonesia and Bangladesh.
