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Trade-weighted average tariff for Sri Lanka at 28.8%
View(s):By Kapila Bandara
Average tariffs imposed on Sri Lanka’s goods by the United States after the 90-day pause by the Trump Administration is 28.8%, calculated on a trade-weighted basis, compared with 19.4% during the 90-day window, new global data show.
This calculation by UN Trade & Development and published Friday takes into account measures announced by the United States between February 1 and August 7.
To calculate a trade-weighted average tariff rate, the total tariff revenue is divided by the total value of imports.
Before January, the trade-weighted average tariff rate for Sri Lanka was 8.4%, UNCTAD data show, compared with 28.8% now.
For India, the trade-weighted average tariff rate is 36%.
The US President Donald Trump on Friday described country-specific tariffs as the “largest amount of money, wealth creation and influence the U.S.A. has ever seen’’.
The US Tax Foundation has estimated that tariffs would raise US$2.1 trillion in revenue over the next decade on a conventional basis, without considering the negative effects of tariffs on the US economy.
Sri Lanka faced tariffs of 44% but this was negotiated downwards to 20% by August 1 through high level negotiations, which also involved President Anura Kumara Dissanayake online at various points. The 20% tax came into effect Friday.
A trade-weighted basis is a common method of reporting average tariffs.
Simplified, the reciprocal tariffs imposed by the United States in April considered the bilateral goods trade deficit with a trading partner, divided by all imports from that country and then that divided by two.
For Bangladesh, a competitor of Sri Lanka in the apparel trade, the trade weighted tariffs after the 90-day pause is 30.8%, UNCTAD data show. This is an increase from 20.8% during the 90-day break. For Vietnam, another competitor, the rate is 22.5%, an increase from 16.1% during the 90-day window.
Sri Lanka’s biggest bilateral trade partner India is facing 50% duty in total. A 25% additional duty was announced Wednesday and will be effective in 21 days.
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