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

¶ 01 Mr. Deputy Speaker, thank you for the opportunity.

¶ 02 There has been much discussion regarding the tariffs imposed by the United States. As we stated earlier, on 2nd April, as before, the US imposed tariff duties globally and imposed a 44% tariff on us. On 2nd April, we appointed a committee and took steps accordingly, holding several rounds of discussions via Zoom with relevant institutions. As an outcome, on two occasions our designated State officials visited the United States to explore a bilateral trade agreement and the nature of the trade gap. We export about US$3 billion while importing around US$300 million, leading to an 88% trade gap; part of this led to the 44% tariff. We have continuously negotiated to reduce it and we are still engaged in those talks.

¶ 03 Meanwhile, official high-level diplomatic discussions were held between the two countries. The US, under its policy, proposed various steps, including an extension for three months, which ended on the 9th of this month. Thereafter, courtesy letters were sent to a number of selected countries saying that with effect from 1st August, the tariffs would apply. We also received such a courtesy letter, stating that if by 1st August we have not entered a bilateral trade agreement, a 30% tariff would be imposed. The 30% we received is a direct outcome of our negotiations. Of the 25 countries that received courtesy letters, Sri Lanka obtained the largest relief, reducing the tariff from 44% to 30%. No other country has received such relief; some have even higher rates—for example, Brazil from 10% to 50%.

¶ 04 Our position is to continue, at diplomatic level, the negotiations to enhance trade relations and further reduce this rate. If we do not reach an agreement by 1st August, the 30% will apply. Therefore, we will continue uninterrupted bilateral negotiations to further reduce this rate through diplomacy, Mr. Deputy Speaker.