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

¶ 01 Hon. Speaker, with respect to trade matters presented by the United States, the recently raised issue is the prospective move towards reciprocal tariffs under a “fair trade” approach. The relevant policy outline is expected to be announced in April. Meanwhile, taking into account the current situation, and with special attention to geopolitical and other factors, we are studying the potential impacts on Sri Lanka’s export sector.

¶ 02 Media reports indicate the April 2025 timeline for announcement. In a reciprocal tariff and fair-trade framework, parameters considered typically include bilateral trade balances, exchange rates, relative strengths and weaknesses, tariff rates, VAT and other taxes. In Sri Lanka’s case, our bilateral trade balance with the US is favorable, which is positive. At the same time, the rupee remains weak relative to the dollar; given we do not have a strong currency, that somewhat cushions certain impacts on our exporters’ pricing.

¶ 03 Diplomatically, our relations with the US are constructive, reducing potential negative fallout. Nevertheless, we are studying reciprocal tariff issues carefully. The Ministry of Finance, the Ministry of Trade, the Export Development Board and other agencies are engaged in this analysis. For 2024 US trade exposure, the most impacted sectors are identified as: apparels and textiles, rubber and rubber products, coconut and coconut-based products, and plastics, among others. Together, these account for roughly 86 percent of our export earnings.

¶ 04 Actions underway include initial engagements through our Embassy in Washington, D.C., with the Office of the United States Trade Representative (USTR). In Colombo, we convened a discussion at the Lakshman Kadirgamar Institute under the leadership of our Deputy Minister of Foreign Affairs and Foreign Employment Hon. Arun Hemachandra, with cross-sector stakeholders; I participated along with our Deputy Minister of Finance and Procurement Hon. Harshana Suriya-Peruma, and Hon. Attorney-at-Law Lakmali Hemachandra, MP. A follow-up session is being held today. We are conducting this analysis to be ready to decide and act appropriately as the situation evolves.