• 44% levy removes competitiveness in key sectors like textiles and rubber
• SL to propose trade gap reduction to US, faces IMF constraints on tariff removal

US reciprocal trade tariff on Sri Lanka impacts 86% of the products in the country’s export basket, removing the competitiveness of those products in the US market, Economic Development Deputy Minister Prof. Anil Jayantha Fernando said.

Speaking to the media on Sunday (6), he said that the 44% tariff that will be implemented on Wednesday (9) will impact 86% of exports products across five main sectors.

Those sectors, he said are textiles, plastics and rubber products, food products, jewellery and precious metals and chemical products.

“The competitiveness of our products are removed through the implementation of the 44% tariff,” Fernando said, adding that the US Trade Representative Office has asked Sri Lanka to propose ways to reduce the trade deficit Sri Lanka has with the US.

The US has long been Sri Lanka’s most important export destination, accounting for 23% of total merchandise exports in 2024. Sri Lanka exported $ 3.4 billion worth of goods to the US in 2024, out of which 70% are from the apparel sector, Sri Lanka imports from the US amounted $ 368.2 million last year.

Moreover, Fernando said that despite several attempts by Sri Lanka to engage with the US Trade representative’s office, the office had responded that bilateral discussions with countries on the tariffs will start after the announcement of tariffs imposed on all countries.

Therefore, he said that Sri Lanka will present proposals to reduce the trade gap between the US today, to the US Trade Representative.

Further, he said since Sri Lanka is currently going through a International Monetary Fund (IMF) programme under pre-agreed conditions, to remove taxes or tariffs on the US, the government will have to first discuss those with the IMF.