Governor of the Central Bank of Sri Lanka (CBSL), Dr. Nandalal Weerasinghe, has said that a potential 44% reciprocal tariff on Sri Lankan exports to the United States is unlikely, citing early diplomatic engagement and easing trends in global trade tensions
Speaking at a public lecture last Friday on the “State of the Economy” as reflected in the 2024 Annual Economic Review, Dr. Weerasinghe assured that the Government had already initiated discussions with the US Trade Representative’s Office, allowing time for negotiations before the current 90-day tariff pause expires.
“I don’t think it’s a likely scenario,” he said, referring to the feared tariff hike, pointing to recent global developments including the US and China easing their trade duties as a sign that extreme measures are now less probable.
However, he acknowledged that some level of tariffs may still be imposed, and emphasized the importance of continuing dialogue to mitigate risks.
Meanwhile, CBSL Economic Research Director Dr. S. Jegajeevan warned that global economic uncertainty and trade fragmentation pose challenges to Sri Lankan exports.
Citing IMF and WTO projections, she noted that global growth is expected to slow to 2.8% in 2025, while global trade volumes are projected to decline by 0.2%.
“Sri Lanka’s heavy reliance on the US market makes sectors such as garments, rubber products, and coconut-based goods particularly vulnerable if trade barriers increase,” she said.
She further warned that inflationary pressures stemming from global trade restrictions, along with tightening financial conditions and potential capital outflows, could influence Sri Lanka’s monetary policy decisions going forward.
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