SL to discuss with US on reducing reciprocal tariff: Minister

By Ajith Siriwardana

The government is expecting to have diplomatic level discussions with the United States to see the possibility of reducing the new reciprocal tariff system introduced by US President Donald Trump and to agree on trade and investment policy which will benefit both countries, Minister of Labour Anil Jayantha said yesterday.  

He said the government will initiate discussions to see the possibility of reducing tax before April 9 when the tax is set to be implemented.   

Refuting allegation by opposition parties that the government failed to make intervention to prevent tax, the Minister said the government discussed with relevant institutions what measures are to be followed in such a scenario as ministries and expert teams. We cannot prevent US trade policy. We need to discuss. We already exchanged views with them,” he added.   

The Minister said Sri Lanka was facing a special economic situation where it is engaged in a programme with the IMF and was recovering from an economic downfall and added that Sri Lanka has a chance to explain the situation. “We are looking to see the possibility of reducing the reciprocal tariff through discussion before it is implemented on April 9. Sri Lanka is in a special situation even though we have a beneficial trade balance. We are moving forward with an IMF programme. We are trying to stabilize the economy and working with international institutes and countries with understanding. So, we have a chance to explain our situation. We will have to explain it in accordance with their policy. We cannot influence another country,” he said.   

The Minister said Sri Lanka’s apparel and food export industry will negatively be affected due to this tariff.  

“Prices of exports will go up due to this new tariff and there might be a reduction of competition for our exports in the US market thereby dropping the demand and export revenue. Our exporters will have to face profit reduction,” he said.   

He said if the discussion with the US government failed, Sri Lanka will consider alternatives such as to discuss on getting special benefits under the GSP+ facility.   

“We can also consider simplifying our custom duty. We expect to discuss with the US on diplomatic level to agree on trade and investment policy while developing long term relationships to benefit both countries,” he said.