The proposed 12.5% tariff announced by the Office of the US Trade Representative (USTR) is not a new levy, but relates to the same reciprocal tariff process negotiated with the US. Export Development Board (EDB) Chairman Mangala Wijesinghe clarified this yesterday.
Addressing a media briefing, Wijesinghe explained that Sri Lanka initially faced a 44% tariff when reciprocal tariffs were announced on 2 April. Following several rounds of discussions with US authorities, the rate dropped successively to 30%, then 20%, before both sides agreed on a 10% tariff.
The current 10% tariff ends this July, hence the new 12.5% tariff, he said.
Discussions with US counterparts continue through the Trade, Commerce, Food Security and Co-operative Development Ministry in an effort to prevent the proposed 12.5% tariff from taking effect on 24 July, Wijesinghe said.
Sri Lanka could avoid the proposed levy if the two countries succeed in signing the proposed trade agreement before the deadline, he expressed confidence.
Sri Lanka's deadline to submit its appeal is 9 July, and authorities remain optimistic that the US will give favourable consideration to the country's representations to secure a competitive tariff rate between 10% and 12.5% in the region, the EDB chief added.
A notice of determinations and proposed responsive actions under Section 301 investigations into the failure of 60 economies to prohibit and effectively enforce bans on imports of goods produced with forced labour was issued by the USTR on 2 June.
Under the proposal, the USTR plans to impose an additional ad valorem tariff of either 10 per cent or 12.5% on imports from the affected economies, subject to several product-specific and trade agreement exemptions. The agency accepted public comments on the proposal until 6 July and scheduled a public hearing today (7).
Sri Lanka is among the countries proposed to face the higher 12.5% tariff rate after the USTR determined that they failed to impose and effectively enforce a prohibition on imports of products made with forced labour. The proposed tariff takes effect on 24 July unless amended following the review process.
Addressing a media briefing, Wijesinghe explained that Sri Lanka initially faced a 44% tariff when reciprocal tariffs were announced on 2 April. Following several rounds of discussions with US authorities, the rate dropped successively to 30%, then 20%, before both sides agreed on a 10% tariff.
The current 10% tariff ends this July, hence the new 12.5% tariff, he said.
Discussions with US counterparts continue through the Trade, Commerce, Food Security and Co-operative Development Ministry in an effort to prevent the proposed 12.5% tariff from taking effect on 24 July, Wijesinghe said.
Sri Lanka could avoid the proposed levy if the two countries succeed in signing the proposed trade agreement before the deadline, he expressed confidence.
Sri Lanka's deadline to submit its appeal is 9 July, and authorities remain optimistic that the US will give favourable consideration to the country's representations to secure a competitive tariff rate between 10% and 12.5% in the region, the EDB chief added.
A notice of determinations and proposed responsive actions under Section 301 investigations into the failure of 60 economies to prohibit and effectively enforce bans on imports of goods produced with forced labour was issued by the USTR on 2 June.
Under the proposal, the USTR plans to impose an additional ad valorem tariff of either 10 per cent or 12.5% on imports from the affected economies, subject to several product-specific and trade agreement exemptions. The agency accepted public comments on the proposal until 6 July and scheduled a public hearing today (7).
Sri Lanka is among the countries proposed to face the higher 12.5% tariff rate after the USTR determined that they failed to impose and effectively enforce a prohibition on imports of products made with forced labour. The proposed tariff takes effect on 24 July unless amended following the review process.
