Mixed views on 20% US tariffs on Sri Lankan goods
View(s):The tariff is a sharp reduction from the first announced 44 per cent, some months back, which came down to 30 per cent and then following extensive video/zoom discussions between Sri Lanka and US trade officials and also a video discussion between President Anura Kumara Dissanayake and the US chief Trade Representative, eventually resulted in the rate being reduced to 20 per cent.
So what next, The Sunday Times Business asked key officials in sectors affected by the new US tariffs. “It’s not easy. If you take the current rate of taxation on the apparel industry which averages 20 per cent, it’s a 100 per cent increase and now the total average tax would be 40 per cent,” a CEO of a large garment manufacturing company said. Apparel taxes were earlier from a low of 6 per cent to a high of 33 per cent.
Pointing out that at least Sri Lanka is on par with its peers in the region in terms of the new tariff, he said they would be talking to US buyers to see how they could jointly move forward.
Dr. Roshan Rajadurai, Planters’ Association spokesman, said that while there would be overall concern, the US is a ‘cold’ tea market and would adversely impact exporters who deal in this specialised market. “But the biggest issue for the tea industry is the removal of the SVAT from October 2025 which would have a devastating impact across the industry,” he added.
However the Exporters’ Association of Sri Lanka welcomed the new tariff rates and commended the trade negotiations between Sri Lanka and the US which led to a reduction in tariffs. The Joint Apparel Association Forum (JAAF) also welcomed the revised reciprocal tariff rate and commended the Government of Sri Lanka for its steadfast efforts in securing this critical outcome for the apparel sector.
“We extend our sincere gratitude to President Anura Kumara Dissanayake for his leadership, and to the negotiating team led by Dr. Harshana Suriyapperuma, Secretary to the Treasury, for their pragmatic and sustained engagement since the initial tariff announcement in April. Their tireless efforts throughout this complex process have been instrumental in achieving a fair and competitive outcome for Sri Lankan exporters,” JAAF said in a statement.
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