In a significant boost to Sri Lanka’s export economy, U.S. President Donald Trump has signed an executive order reducing import tariffs on Sri Lankan goods to 20%—a dramatic drop from the steep 44% announced in April. The decision, confirmed by the White House recently, comes as a major relief to Sri Lankan exporters, particularly in key industries such as apparel, ICT, minerals, tea and aquatic products, who were struggling to remain competitive in one of their largest markets, the National Chamber of Exporters has said.
Extracts from the NCE media statement: “This breakthrough is the result of strategic diplomatic efforts, and the leadership of the National Chamber of Exporters (NCE) has warmly welcomed the move.
“NCE president Indhra Kaushal Rajapaksa commended the government and the negotiating team, stating:
‘This is a timely and hard-won achievement. The reduction in tariffs creates breathing space for our exporters and reopens doors to the U.S. market. The negotiating team must be applauded for delivering this positive result amidst a complex and highly protectionist global trade environment.
‘We commend the professionalism and persistence of the Sri Lankan officials and negotiators who made this breakthrough possible. Their efforts have created a platform for renewed optimism within our export community.’
However, NCE Secretary General/CEO Shiham Marikar cautioned that while the tariff cut provides a more level playing field, Sri Lankan exporters are still burdened by high domestic costs:
‘Electricity, logistics, port charges, and regulatory red tape make the cost of production in Sri Lanka significantly higher than in countries like Vietnam, Bangladesh, and India. Without addressing these fundamental inefficiencies, we risk falling behind—despite having tariff access.
‘While the reduced U.S. tariffs are welcome, Sri Lanka must now take a broader and long-term view of its export strategy.
‘We cannot be overly dependent on a single market like the U.S., said Marikar. ‘Global trade is becoming increasingly volatile. To ensure resilience, Sri Lanka must diversify its export destinations, add more value to its products and focus on niche markets.’
“Exporters are encouraged to explore emerging markets in the Middle East, Africa, Eastern Europe, and Latin America—regions that offer growing demand and fewer entry barriers. Government-to-government trade agreements, regional partnerships, and targeted marketing efforts are key to accessing these untapped opportunities.
“Sri Lanka’s traditional reliance on raw and semi-processed exports must shift toward innovation-driven, high-margin products. For example:
“Instead of bulk tea, promote premium wellness teas with sustainable packaging.
“In apparel, capitalize on ethical manufacturing to build global brands.
“Value addition not only increases export earnings but also enhances Sri Lanka’s positioning on the global stage.
“Sri Lanka should focus on sectors that prioritize quality, traceability, sustainability and ethical sourcing. These include: Artisanal foods, Organic products, Designer home décor, Wellness goods, Fair-trade certified apparel”