Sri Lanka hopeful of positive outcome amid US tariff deadline looms: Treasury Secy.

Monday, 7 July 2025 06:13 - - {{hitsCtrl.values.hits}}

With just a couple of days remaining ahead of the crucial 9 July deadline to negotiate reciprocal tariffs adjustments, Sri Lanka is pinning its hopes on a positive breakthrough which would not hamper its economic recovery efforts.

Addressing a media briefing yesterday, Treasury Secretary Dr. Harshana Suriyapperuma expressed hope that Sri Lanka could expect a favourable stance from the US on the looming reciprocal tariffs.

“We had several rounds of discussions with the US Trade Representative (USTR). They’ve indicated Sri Lanka is in a relatively better position, but at the end of the day, the decision will factor in the broader global trade scenario,” he told journalists.

His comments come in the wake of US President Donald Trump’s announcement on Saturday that he had signed letters to 12 countries detailing “take it or leave it” tariff offers, which are scheduled to be sent out on Monday (today).

“Ultimately, however, the decision will depend not just on Sri Lanka, but on the broader global trade environment,” he noted.

On 2 April, the US President announced a 10% baseline tax on all imports and substantially higher rates for countries with trade deficits against the US. Sri Lanka was among those hardest hit, facing a steep proposed tariff of 44%.

Following intense international pushback, the US suspended the implementation of these additional tariffs for 90 days to allow for negotiations. This suspension expires on 9 July, with the US President on Friday warning that tariffs could rise even further up to 70% if no deals are struck and would be enforced from 1 August.

“Our hope is that given our proactive engagement, multiple discussion rounds, and overall cooperation with the USTR, Sri Lanka will get a positive stance,” Dr. Suriyapperuma reiterated.

The Treasury Secretary acknowledged that some countries had already managed to secure deals.

So far, the UK reached an agreement in May to maintain a 10% base tariff, with preferential treatment for certain sectors like automobiles and aircraft engines. In addition, Vietnam last week negotiated a cut on tariffs from a threatened 46% to 20%, with many US products allowed duty-free entry in return.

The US remains a key trading partner for Sri Lanka, having imported $ 3 billion worth of goods from the island nation last year. Over 70% of these exports came from the garment sector, making the US market critical for Sri Lanka’s economy.

As part of these efforts, a Sri Lankan delegation on the direction of President Anura Kumara Disanayake, in his capacity as the Finance Minister, met USTR Ambassador Jamieson Greer in Washington DC on 22 April (https://www.ft.lk/front-page/Sri-Lanka-and-US-hold-high-level-talks-in-Washington-over-reciprocal-tariffs/44-775876).

The delegation presented formal communications from the Government, outlining challenges the country has faced and highlighting reforms underway to achieve sustainable economic recovery (https://www.ft.lk/front-page/SL-adopts-measured-stance-in-trade-talks-with-US/44-776052).

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