Sri Lanka in advanced talks with U.S. on sweeping tariff relief for key exports

Date:

July 17, Colombo (LNW): Sri Lanka is engaged in high-level negotiations with the United States over a potential trade arrangement that could see a substantial majority of its exports entering the American market duty-free.

According to Deputy Minister of Economic Development Professor Anil Jayantha Fernando, the United States has extended a preliminary offer to waive import tariffs on approximately 70 to 80 per cent of goods currently exported from Sri Lanka.

The offer forms part of ongoing bilateral discussions aimed at recalibrating trade relations in the wake of shifting U.S. trade policy, particularly following Washington’s move to reassess trade balances with various countries under a more protectionist framework introduced earlier this year.

Speaking during a televised policy segment aired on today (17), Professor Fernando revealed that a provisional list comprising over 1,100 product lines—ranging from garments, which are one of Sri Lanka’s main exports, to 42 agricultural items—has been identified for potential duty exemption.

He noted, however, that the finer details of the proposed agreement remain confidential, given the sensitive nature of diplomatic and technical negotiations. “These matters involve not just economics, but diplomacy and strategic planning. Until a formal understanding is reached, we must maintain discretion,” the Deputy Minister said.

Professor Fernando also indicated that the Sri Lankan side is exploring the possibility of reciprocal benefits, including tariff reductions or even complete exemptions for goods imported from the United States. He pointed out that Sri Lanka currently imports roughly US$ 300 million worth of goods annually from the U.S., most of which fall within a tariff range of 0 per cent to 20 per cent.

“Even modest adjustments on certain import duties would have minimal fiscal impact, given the relatively low volume,” he added.

A delegation of Sri Lankan trade and economic officials is expected to depart for Washington on tomorrow (18) to continue the next phase of the negotiations. These talks are seen as critical in cushioning Sri Lankan exporters from the potential effects of a proposed 30 per cent tariff on certain goods bound for the U.S. market, which the White House has indicated could come into effect from 1 August.

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