ECONOMYNEXT – After U.S. President Donald Trump’s unprecedented decision to impose a 44 percent reciprocal tariff on Sri Lankan exports, the island nation’s government has pledged to reduce tariff and non tariff barriers in a way to ease the restrictions for businesses, the country’s Finance Ministry said.
Trump’s move, if implemented, is likely to result in devastating impact on the island nation’s economic recovery under an International Monetary Fund (IMF) programme after facing an unprecedented sovereign debt default in 2022.
“We are committed to substantially reduce tariff and non tariff barriers that hinder trade and investment improvement,” the Finance Ministry said in a statement. .
“Improving the ease of doing business remains a top priority of the government, as we strive to create an environment that encourages innovation, fosters commercial partnerships and unlocks opportunities for both nations.”
Analysts say Sri Lanka’s tariff and non-tariff barriers have dragged a lot of international trade and deprived consumers of quality imported goods at cheaper price amid heavy protectionism.
“The government reaffirms its strong commitment to deepening economic ties with the US, a long standing friend and trusted trading partner,” the Finance Ministry said.
It said Sri Lanka has been engaged in an IMF extended fund facility since March 2023 as part of its recovery from the unprecedented economic crisis, and successfully completed the third review of the program.
“In this context, we appreciate the steadfast support extended by the US in supporting Sri Lanka’s economic recovery, in particular the support in the external debt restructuring efforts we have now stabilized our economy and on a steady growth path of 5% in 2024.”
“Considering our export exposure and potential slowdown in global demand, we are concerned that our recovery path could be constrained.”
“The government stands ready to engage with the US administration at the earliest opportunity to explore ways to manage the trade balance in a fair manner.” (Colombo/April 04/2025)