United States has revised its proposed tariff on imports from Sri Lanka, reducing it from the initially threatened 44% to 30%, effective 1st of next month. The decision is part of a broader trade policy under President Donald Trump, and follows high-level negotiations between the two countries, including talks held in Washington in May this year.
While the reduction offers some relief, the new tariff is expected to weigh heavily on Sri Lanka’s economic recovery, which hinges on export-led growth. Notably, the island nation is recovering from its worst-ever economic crisis, the peak of which was faced in 2022.
The United States is the island nation’s largest export destination, particularly for garments, apart from rubber products, tea, gems and seafood. However, the apparel sector is likely to be the hardest hit, potentially triggering job losses and a drop in foreign exchange earnings. The impact may ripple into household incomes and public sentiment. The move may also hurt investor confidence, especially for firms operating in Sri Lanka that export to the US.
Reacting to the tariff announcement, Deputy Foreign Minister Arun Hemachandra said that this is a positive moment for Sri Lanka. Agencies quoted the Minister as saying that Sri Lanka received the largest cut among all listed countries.
Must Read
- Advertisement -
