• Bilateral talks expected to secure special rates, avoiding broad tariffs on 14 other nations
• Govt. anticipates favourable deal, benefiting local industries by 1 Aug deadline

The Government of Sri Lanka (GOSL) is confident that Sri Lanka will not face a steep blanket tariff rate, since it has not been listed among the 14-countries that were addressed in letters sent by the United States Government on Monday (7), due to its negotiation talks, Economic Development Minister Prof. Anil Jayantha Fernando told parliament yesterday (8).

Referring to the Trump administration’s upcoming deadline for trade negotiations on 1 August, Fernando said that the US Government will today reveal what its policy for each country will be.

“As a result of bilateral talks, countries which have established a relationship on bilateral trade and investment will likely be presented with special rates,” Fernando said.

Sri Lanka at present is faced with the possibility of being levied a 44% tariff for its exports to the US, a rate referred to by the administration as a “discounted reciprocal tax”, calculated based on half of what the US claims is Sri Lanka’s average import tariffs on American goods (88%) - a barrier to US goods entering the local market.

Back in April, the US premier announced a 90-day pause on the steepest proposed tariffs, after the introduced tariffs ensued volatile reactions across global markets.

The 14 countries that had been warned of the impending levies in order of the highest tariffs include; Laos: 40%, Myanmar 40%, Cambodia: 36%, Thailand: 36%, Bangladesh: 35%, Indonesia: 32% and South Africa: 30%.

Other countries with tariffs at or below 30% included Japan, South Korea, Malaysia, Kazakhstan and Tunisia.

Speaking to reporters on Sunday (6), President Trump stated that he would conclude deals with “most countries” by Wednesday (9).

Speaking to parliament, Fernando said: “In the outset, it can be observed that the bilateral trade agreement with these countries is not at a successful place, therefore that is why their lowest is 25%, and the highest, such as in Myanmar and Laos are at 40%, and South Africa with 30% and Bangladesh with 35%.”

The Trump administration issued these warnings with the intention of arriving at more favourable terms for the US by 1 August - the deadline for negotiations. In a TV interview with CNN, US Treasury Secretary Scott Bessent stated that countries that do not reach a deal with the United States by 1 August would face even higher tariffs.

“There’s a notable point there, the 14 countries are presented with these rates until 1 August, after which the countries will have to move into different rates, if they choose to not come into favourable agreement within the given time-span,” Fernando told parliament.

“We have high confidence in the talks we have held, and that once the agreement is signed, this will reap benefits for our industries, economy and working public.” Fernando said.

Among the countries which have negotiated lowered tariff rates so far include the UK, China and Vietnam. The Chinese government was able to negotiate its initially proposed 145% tariff to 30%, with duties on US exports simultaneously falling from 125% to 10%.

The UK was able to negotiate its adherence to the 10% base tariff, in exchange of waiving off its tariffs on beef and ethanol exports to the US, despite its local steel and aluminium industries remaining subject to a 25% tariff.

The Vietnamese government was able to negotiate its 46% tariff to 20%, however with a 40% tariff for “transshipping” - an ostensibly favourable outcome for its $ 136.6 billion export market to the US.

Treasury Secretary Dr. Harshana Suriyapperuma told media on Sunday that though the US Trade Representative (USTR) office has been accommodating towards the negotiations initiated by the Sri Lankan government, the outcome will likely be determined by the office’s position on global trade.