ECONOMYNEXT – Sri Lanka should highlight the services the country imports from the US, including computer software, the welcome stance for US brands and for many years as well as being the first to invite Starlink in the region, an export industry official said.
Shiham Marikar, Chief Executive Officer of the National Chamber of Exporters said US tech firms like Google to twitter freely operate in the island, and American brands from KFC to McDonalds have been welcome in the island for many decades.
Sri Lanka’s government is now taking action to engage with the US which was appreciated by exporters, he said but the US had not considered the broader trade relationship.
The US calculated a 44 percent tax, based on the hard goods trade deficit, which the US said represented the final results of tariff and non-tariff barriers.
Sri Lanka has been a “long-standing and reliable partner of the United States, not only in trade but also in facilitating American brands and interests within our borders,” he said.
“We propose that Sri Lanka’s case be evaluated not just through a trade balance lens, but also in terms of strategic partnership, mutual cooperation, and shared economic benefits,” Marikar said.
Sri Lanka students also spend millions of dollars each year to study in the US, none of which are captured in the trade data, he pointed out.
Firms such as booking.com operate in the island so far tax free, as does Uber.
Marikar’s comments come as the the European Union as some officials indicating that US services would be targeted when they retaliate after April 09, raising the stakes for services going forward.
“But we are also going to attack services. For example, online services, which are not taxed today but could be,” French government spokesperson Primas said last week.
French President Emmanuel Macron has also urged French firms not to invest in the US.
Key points in a nutshell.
Sri Lanka–U.S. Trade Relations: Addressing the Proposed Tariffs
We acknowledge and commend the proactive efforts by the Government of Sri Lanka to engage with U.S. authorities in a bid to reverse, reduce, or mitigate the impact of these measures.
However, we must emphasize that imposing such tariffs will have serious and adverse implications for Sri Lankan exporters, particularly in key sectors such as Apparel, Rubber, and Tea—three of Sri Lanka’s highest-performing and employment-generating industries.
In this context, it is critical that Sri Lanka:
Intensifies bilateral dialogue with U.S. trade officials at both the diplomatic and industry levels, with the support of our Mission in Washington and private sector associations.
Key Relationship Highlights with the U.S.
Brand Presence: Sri Lanka has continuously welcomed and supported major American brands. Global names such as McDonald’s, Burger King, Baskin-Robbins, Pizza Hut, Domino’s, and others have established operations in Sri Lanka, offering visibility and market share in South Asia.
Technological Collaboration: Notably, Sri Lanka was the first country in the region to grant approval for Starlink services, showcasing our openness to cutting-edge American technology and innovation—well ahead of our regional peers. This bold decision reflects our intent to align with U.S.-led advancements and promote digital connectivity, even in remote parts of the island.
Geopolitical Alignment: Sri Lanka has historically maintained friendly relations with the United States, supporting its initiatives and maintaining a neutral, democratic, and open-market economy that aligns with key U.S. values.
Urgent Need for Fair Consideration
In view of these strong ties, we respectfully urge U.S. policymakers to consider Sri Lanka’s economic vulnerabilities, especially in the context of our recent debt crisis and ongoing IMF-supported recovery process.
A punitive tariff regime would disproportionately impact our export-led recovery, jeopardize thousands of jobs, and undermine the goodwill that exists between our two nations.
We propose that Sri Lanka’s case be evaluated not just through a trade balance lens, but also in terms of strategic partnership, mutual cooperation, and shared economic benefits.