Sri Lankan exporters are facing growing anxiety as the United States’ 30% reciprocal tariff on imports from the island is set to take effect on August 1, with no official word yet on whether the rate will be revised.
The tariff—part of the U.S. Trade Realignment Initiative—has led to varying outcomes for countries in the region. While Sri Lanka’s rate remains among the highest, competitor nations such as Vietnam (20%) and India (25%) have already secured more favorable terms. Bangladesh, initially hit with a 35% rate, is expected to win a reduction following trade concessions offered to the U.S.
A high-level Sri Lankan delegation is currently in Washington engaging in talks with the U.S. Trade Representative, but as of July 30, no revised tariff has been announced. Acting Finance Minister Dr. Anil Jayantha said the government reduced the rate from 44% to 30% through earlier negotiations and remains hopeful for further progress before the August 1 deadline.
The apparel sector—Sri Lanka’s largest export industry—is especially vulnerable, as it contributes nearly 40% of total exports and relies heavily on the U.S. market. Industry leaders warn that the 30% tariff could lead to job losses, lost orders, and long-term damage to competitiveness, as global buyers may shift to lower-cost suppliers.
The IMF has flagged the tariff as a major risk to Sri Lanka’s fragile economic recovery, estimating that up to $3 billion in exports could be affected annually if the rate is not revised. With just hours left, exporters remain on edge as hopes hinge on a last-minute breakthrough.
