Sri Lanka is actively pursuing a bilateral trade agreement with the United States, aiming to bolster. exports while securing tariff relief for Sri Lankan goods in agreement with President Donald Trump’s recent directive to open local market for US exports, .
The government’s official negotiating team has adopted a targeted strategy in their ongoing talks with the U.S. Trade Representative (USTR) to mitigate the impact of the proposed 30 percent Trump-era tariffs set to take effect on August 1.
Following the formal notification on July 9, Sri Lankan officials held a first round of talks which reportedly made “progress,” with a second virtual round is now on.
The present administration is to target sector-specific relief, to be pointed specifically towards apparel, rubber-based products, and tea exports, which form the principal affected shipments.
Insiders close to the negotiators say Sri Lanka has been presented as a US trade partner at risk of economic instability, while stressing its economic reforms, geopolitical neutrality, and regional supply chain integration.
Sri Lanka is also leveraging regional allies’ diplomatic assistance and touting U.S. economic interests that benefit from low-cost manufacturing of the country.
Meanwhile, exporters and the Joint Apparel Association Forum have urged for immediate concessions to avoid disruptions to nearly US $2 billion worth of exports.
Sri Lankan officials have also said that the loss of revenues from US imports would not be very big and non-tariff issues could be discussed, but the country generally did not have non-tariff barriers against the US.
“The United States and Sri Lanka have discussed conducting virtual engagements on labor policy reforms and agricultural barriers,”a high official said. .
Economic Development Deputy Minister Anil Jayantha Fernando’s recent claim that the United States has suggested allowing 70–80 percent of Sri Lankan exports to enter the U.S. duty-free has been questioned amid a lack of official confirmation.
Speaking at a television program, Fernando said America had proposed a list of 1,161 Sri Lankan products—clothing and 42 agricultural items—for potential tariff-free entry, as part of the current bilateral trade negotiations.
Yet trade specialists note that the U.S. has not made any public comment in support of such a wide-ranging offer.
The US Generalised System of Preferences (GSP) of which some duty-free access expired in 2020 and is yet to be renewed by the U.S. Congress. Apparel, Sri Lanka’s most vital export, has never been brought under such concessions because it is sensitive in US trade policy.
Fernando also revealed that the negotiations are in “final phase, “which is not so at the moment. No trade deal has been signed, and U.S. trade deals are typically lengthy, prolonged negotiations, with stakeholder consultations and Congressional approval
The Minister also hinted at a new agreement in importing oil from the U.S., explaining that Sri Lanka could redirect oil payments into higher trade flows. Yet this too remains speculative, with no public or commercial agreements reported.
Observers caution that while enhanced trade with the U.S. is a welcome goal, the figures and outcomes mentioned by the minister should be treated as provisional until confirmed by both governments.
