EDB says proposed 12.5% US tariff not new, hopeful of avoiding levy through trade pact

Tuesday, 7 July 2026 04:55 - - {{hitsCtrl.values.hits}}

Export Development Board (EDB) Chairman Mangala Wijesinghe yesterday clarified that the proposed 12.5% tariff announced by the Office of the US Trade Representative (USTR) is not a new tariff, but relates to the same reciprocal tariff process that has been under negotiation with the US.

Addressing a media briefing, Wijesinghe explained that Sri Lanka was initially subjected to a 44% tariff when reciprocal tariffs were announced on 2 April. Following several rounds of discussions with the US authorities, the rate was successively reduced to 30%, then 20%, before both sides agreed on a 10% tariff.

“The current 10% tariff is ending this July, hence the new 12.5% tariff,” he said.

Wijesinghe said the Trade, Commerce, Food Security and Co-operative Development Ministry is continuing discussions with the US counterparts in an effort to prevent the proposed 12.5% tariff from taking effect on 24 July.

He expressed confidence that Sri Lanka could avoid the proposed levy if the two countries succeed in signing the proposed trade agreement before the deadline.

The EDB Chief added that Sri Lanka’s deadline to submit its appeal is 9 July and said authorities are optimistic that the US will give favourable consideration to the country’s representations to secure a competitive tariff rate between 10%-12.5% in the region.

The USTR on 2 June issued a notice of determinations and proposed responsive actions under Section 301 investigations into the failure of 60 economies to prohibit and effectively enforce bans on imports of goods produced with forced labour.

Under the proposal, the USTR plans to impose an additional ad valorem tariff of either 10% or 12.5% on imports from the affected economies, subject to several product-specific and trade agreement exemptions. The agency accepted public comments on the proposal until 6 July and is scheduled to hold a public hearing today (7).

Sri Lanka is among the countries proposed to face the higher 12.5% tariff rate after the USTR determined that they had failed to impose and effectively enforce a prohibition on imports of products made with forced labour. The proposed tariff is scheduled to come into effect on 24 July unless amended following the review process.