Sri Lanka is making a renewed push to renegotiate tariff rates with the United States, aiming to reduce the current 30% tariff to 20% in order to keep its exports competitive in the U.S. market, according to a source familiar with the trade talks.
The 30% tariff was imposed by U.S. President Donald Trump, lowered from the originally proposed 44%. While the Sri Lankan government views this as a partial success, officials believe a further reduction is essential to maintain a level playing field with other exporters.
The U.S. has left the window open for further negotiations until August 1, prompting Sri Lanka to intensify its diplomatic efforts.
President Anura Kumara Dissanayake chaired a meeting with export sector stakeholders last Saturday to discuss the country’s strategy. During the meeting, he emphasized that Sri Lanka would not compromise its sovereignty in pursuit of improved trade terms.
The government is now preparing to dispatch a delegation to Washington, D.C., to negotiate directly with U.S. trade officials in hopes of securing a more favorable deal.
“We hope to bring the tariff down to at least 20%. Without that, our products will struggle to stay competitive,” the source said.
The official also noted that Sri Lanka must evaluate steps to reduce its trade gap with the U.S., including considering the implications of allowing more American imports, particularly in terms of their cost to local consumers.
Sri Lanka exports nearly \$3 billion worth of goods to the United States annually, with garments accounting for approximately \$1.2 billion of that total.
In April 2025, President Trump announced reciprocal tariffs on several countries, including Sri Lanka, but later suspended them for 90 days to allow room for negotiations.
Meanwhile, Sri Lanka is also working to accelerate trade negotiations with other countries, including efforts to resume talks on the Economic and Technology Cooperation Agreement (ETCA) with India.
