Mixed views by Sri Lankan trade bodies over 30 % US reciprocal tariffs

It was a mixed bag of reactions from Sri Lanka’s main trade bodies over the imposition of a 30 per cent reciprocal tariff by US authorities on Wednesday.

While the Ceylon Chamber of Commerce welcomed the reduction in the tariff to 30 per cent from 44 per cent announced earlier, the Joint Apparel Association Forum (JAAF), the main body affected by the tariffs, said it was concerned about the new developments.

“The announcement of a 30 per cent reciprocal tariff by the US, scheduled to take effect from 1st August 2025, has raised significant concern within Sri Lanka’s apparel industry. As one of the country’s largest export earners, the sector relies heavily on access to the US market, and such a steep increase threatens to erode competitiveness, particularly when compared to regional peers,” JAAF said in a statement on Thursday.

JAAF notes that Vietnam has already concluded its negotiations and now faces a 20 per cent tariff, while Bangladesh, though at 35 per cent, has already begun negotiations with the US to secure a reduction. India’s position remains under discussion, but early signals suggest it may receive a more favourable rate than Sri Lanka. In all likelihood Cambodia, another competitor with a tariff rate marginally higher than Sri Lanka will also be negotiating for a reduction.

“If the 30 per cent tariff stands, we risk seeing a migration of US buyers to lower-tariff countries,” JAAF warned. “We strongly urge the Government to continue active engagement with the US Trade Representative (USTR) to secure a better deal for Sri Lanka,” it said.

JAAF said the reduction from 44 to 30 per cent is a recognition of the good faith with which Sri Lanka has been having its dialogue with USTR and JAAF is encouraged by the Government’s comments on Thursday indicating that negotiations with USTR will continue with a sense of urgency ahead of the 1^st August deadline when the 30 per cent will become effective. JAAF further stressed that a diplomatic resolution is vital to safeguarding jobs, sustaining market share, and reinforcing Sri Lanka’s position as a trusted partner in global apparel supply chains.