Sri Lanka should use ISB debt resettlement as leverage for U.S. tariff concessions: Ranil

By YOHAN PERERA

Former President Ranil Wickremesinghe stated yesterday that Sri Lanka should leverage the resettlement of international sovereign bond (ISB) debt in negotiations with the United States to seek relief from the 30 percent tariff currently imposed on its exports.

“Washington wants Sri Lanka to settle its debts to ISB holders. However, this will not be possible if our economy collapses,” Wickremesinghe said, speaking at the launch of Policy Challenges of Globalization, authored by Professor Sarath Rajapathirana. “Therefore, this point must be raised during talks with the U.S. Sri Lanka has already been urged by the U.S. to implement economic reforms and debt restructuring—this issue should be part of that broader conversation,” he said.

He noted that countries like Vietnam and Bangladesh, which were also affected by trade measures under the Trump administration, are now progressing faster than Sri Lanka. “While others are moving forward, Sri Lanka continues to struggle,” he remarked.

When asked whether he would offer the current government advice on dealing with the U.S., Wickremesinghe responded in a lighter vein, “There’s no point — I know they won’t take it.” He also emphasized the importance of regional economic partnerships, calling on Sri Lanka to actively engage with the Regional Comprehensive Economic Partnership (RCEP), which includes China, Japan, and Australia. He underscored the need to align with China’s Belt and Road Initiative, Japan’s Asia-Pacific strategy, and India’s Indian Ocean framework.

“Sri Lanka must strategically position itself within these initiatives, especially given today’s shifting geopolitical landscape,” he said. “There are winners and losers in the current global order—we must be smart enough to choose where we stand,” he stressed.

Commenting on broader geopolitical tensions, Wickremesinghe noted that the U.S. is working to preserve the dominance of the Dollar while trying to undermine China’s powerful manufacturing sector.