In a renewed bid to secure better market access, Sri Lanka is pushing for a reduction in U.S. tariffs from the current 30% to 20%, in an effort to remain competitive under evolving global trade conditions, a source familiar with the negotiations told Saksi TV

The U.S. had initially proposed a 44% tariff on Sri Lankan exports, but President Donald Trump later reduced it to 30%. While Sri Lanka considers this a partial win, officials believe a further cut is critical, especially to compete with other nations enjoying more favorable trade terms.

“The target is to bring it down to at least 20%. Otherwise, our products won’t be competitive in the U.S. market,” the source said. “We also need to assess how expanding imports from the U.S. could affect domestic consumer prices.”

The U.S. has left the negotiation window open until August 1, giving affected countries an opportunity to make their case. In response, the Sri Lankan government is preparing to send a high-level delegation to Washington D.C. for further discussions with U.S. trade representatives.

President Anura Kumara Dissanayake convened a special meeting with key stakeholders last Saturday to strategize. At the meeting, he emphasized that while better trade terms are essential, Sri Lanka would not compromise its sovereignty in the process.

The backdrop to the ongoing negotiations stems from the Trump administration’s April 2025 move to impose reciprocal tariffs on multiple countries, including Sri Lanka. A 90-day suspension was granted to allow time for bilateral talks.

Sri Lanka currently exports approximately $3 billion worth of goods to the U.S., with garments accounting for $1.2 billion of that total. With the clock ticking, Colombo is also working to diversify its trade portfolio by accelerating discussions with other countries, most notably India, with plans to resume talks on the long-pending Economic and Technology Cooperation Agreement (ETCA).