US Imposes 44% Tariff on Sri Lankan Goods

The move is presented as a retaliatory action to what the U.S. administration claims is an 88% tax and a series of trade barriers imposed by Sri Lanka on American products.

The United States has long been Sri Lanka's largest export destination, accounting for approximately 23% of the country's total merchandise exports. 

In 2024, total U.S. goods trade with Sri Lanka was valued at an estimated $3.4 billion, with a notable increase in imports. U.S. goods exports to Sri Lanka reached $368.2 million, marking a 4.9% increase from the previous year. Meanwhile, U.S. goods imports from Sri Lanka totaled $3.0 billion, showing a 6.1% rise.

However, despite the growing trade volume, the U.S. has continued to face a significant trade deficit with Sri Lanka, which stood at $2.6 billion in 2024. This marks a 6.3% increase in the deficit from the previous year, exacerbating concerns over the trade imbalance.

The new tariff is expected to impact a wide range of Sri Lankan exports, including textiles, tea, and rubber products, which make up a significant portion of the country’s exports to the U.S. This decision is likely to have far-reaching economic consequences, particularly as the U.S. remains a vital trading partner for Sri Lanka.

In his statement, President Trump emphasized that the tariff was necessary to counteract what he described as unfair trade practices and to ensure fair treatment for U.S. businesses. "We will continue to take action to protect American industries and workers from trade barriers that put us at a disadvantage," he declared.

Sri Lanka’s government has not yet responded to the imposition of the tariff, but analysts expect the country to engage in discussions with the U.S. to seek a resolution and avoid further trade disruptions.

As the situation unfolds, both nations will closely monitor the impact of this new tariff on their economies and trade relations, with potential ripple effects in global markets.