The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Economic Development

¶ 01 Mr. Deputy Speaker, we have been both proactive and reactive as needed, without panic. Risks and consequences have been assessed.

¶ 02 Diplomatic engagement with the White House and USTR has been continuous. On 14 February 2025, diplomatic measures were taken. The Sri Lankan Ambassador in Washington held ongoing discussions; a report was submitted and evaluated. We also engaged the IMF given the EFF context. On 28 March 2025, a meeting on Trade Policy Analysis and Strategic Alternatives was held: the Embassy reviewed Sri Lanka’s import profile from the US and analysed US global export performance, noting many US goods face para-tariffs globally rather than tariffs; proposals were made accordingly. On 01 April 2025, the Embassy engaged USTR officials Mr. Brendan Lynch (Assistant USTR for South and Central Asia) and Ms. Emily Ashby (Director for South and Central Asia). Immediately after the 02 April Executive Order/announcement, a report was submitted.

¶ 03 The President appointed a Special Committee of industry experts, officials and two Deputy Ministers to propose actions. Several local meetings were held, and a virtual meeting with USTR officials discussed mitigation options to reduce the trade deficit—the metric underlying the formula. Another virtual meeting with USTR is scheduled tonight at 8.00 p.m.

¶ 04 Before the announcement, multiple roundtables were held at the Lakshman Kadirgamar Institute with politicians and experts. The President also wrote directly to US President Donald Trump proposing mitigation paths and requesting collaboration; the White House has acknowledged receipt.

¶ 05 Claims that we have not acted are incorrect. The US has applied a standard formula globally, leaving no room for proactive pre-announcement concessions. Example: India engaged the US but still faces a 26% reciprocal tariff—50% of a US$85 billion trade deficit over imports. Moreover, before 02 April, US Treasury Secretary Scott Bessent stated each country would receive a figure representing their tariff; reductions could be negotiated after issuance.

¶ 06 On market diversification, we are exploring GSP+ in the EU, the UK’s DCTS, and opportunities in China, the Middle East, India and South Asia, including special trade agreements.

¶ 07 Regarding five-year data, our US trade deficit is about 88% on the measure cited. Around 85% of our US exports are in five product groups, notably apparel and food items—these require focus. US imports to Sri Lanka include food items, pharmaceuticals (tariff zero), turbojets, optical/photographic items, plastics, etc., with tariffs from zero to 20% plus para-tariffs—topics for discussion.

¶ 08 Our team is working on solutions, and we hope for a resolution.