In a significant development for Sri Lankan exporters, the United States has officially confirmed that Sri Lanka’s reciprocal tariff rate will be 20% — reduced from the previously imposed 30% under Executive Order 14257.
The announcement was made via a presidential order issued on July 31, following months of negotiations with U.S. trade authorities. Sri Lanka was listed among a group of countries that secured improved rates after offering what the U.S. described as “meaningful trade and security commitments.”
According to the order, the revised rates will take effect seven days after its issuance — on August 7, 2025— with exemptions for goods already in transit prior to that date.
Sri Lanka now joins regional competitors like Vietnam (20%), Bangladesh (20%), and India (25%) with reduced tariff rates. Notably, Pakistan and Indonesia secured slightly lower rates (19%), which could offer marginal competitive advantages in specific product categories.
However, the executive order also introduces stringent anti-transshipment measures, including a 40% duty on any goods found to be rerouted to evade tariffs. Apparel exporters in Sri Lanka — many of whom ship via third countries — will need to ensure strict compliance with U.S. customs protocols. (Newswire)
