By: Staff Writer
July 22, Colombo (LNW): In a strategic move to rebalance its trade relations with the United States, the Sri Lankan government is exploring the procurement of U.S.-based West Texas Intermediate (WTI) crude oil while actively lobbying for reductions in the steep reciprocal tariffs imposed by Washington. The initiative is part of a broader effort to mitigate the negative impact of U.S. tariffs on Sri Lankan exports and to revive Sri Lanka’s stalled para-tariff reform program.
The government’s renewed push follows a sweeping tariff regime introduced by U.S. President Donald Trump earlier this year, targeting trade deficit countries. Initially, Sri Lankan exports were hit with a 44% tariff, which has since been reduced to 30%, effective August 1. However, Colombo is still striving to secure further relief through high-level engagements with the Office of the United States Trade Representative (USTR).
As part of the counterbalance, Sri Lanka is offering to expand its crude oil procurement base to include American energy exporters. Managing Director of the Ceylon Petroleum Corporation, Dr. Mayura Neththikumarage, confirmed that discussions are underway to consider WTI crude oil in future tenders. Presently, Sri Lanka’s crude oil supplies originate mainly from the Gulf region. The inclusion of U.S.-registered companies in the tender process is aimed at not only diversifying suppliers but also strengthening trade relations with Washington.
“Decisions will ultimately be based on price competitiveness, but incorporating WTI into our oil basket can open new avenues for bilateral trade,” Dr. Neththikumarage noted. He added that any reduction in U.S. tariffs would further benefit Sri Lanka’s economic outlook, particularly for both imports and exports.
On the trade front, the Export Development Board (EDB) is spearheading talks to ease the remaining 30% tariff. EDB Chairman Mangala Wijesinghe revealed that discussions are scheduled before the August 1 deadline in a bid to widen tariff relief. The Ministry of Finance also hosted a virtual meeting on July 18 with USTR officials, led by Secretary Dr. Harshana Suriyapperuma, focusing on boosting trade and investment between the two nations.
Deputy Minister of Economic Development, Prof. Anil Jayantha Fernando, stated that the U.S. has offered Sri Lanka duty-free access for 70–80% of its exports under the revised terms. This includes a list of 1,161 products, such as apparel and 42 agricultural items.
These developments come in the wake of a dramatic global tariff overhaul announced by President Trump. The new tariff regime introduced a baseline 10% levy on all imports, with higher rates for countries running trade surpluses with the U.S. Sri Lanka was among the hardest hit, with an initial 44% tariff—on par with Vietnam and just below Cambodia’s 49%.
In a White House statement, President Trump positioned the tariff campaign as a “declaration of economic independence,” designed to protect domestic manufacturers and rebalance unfair trade practices. However, the sudden imposition of steep duties on long-standing partners like Sri Lanka sparked concern across global trade circles.As discussions continue, Sri Lanka is attempting to turn a potential trade crisis into an opportunity by linking tariff relief to broader trade and energy cooperation with the United States.
