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US-Sri Lanka Trade & Investment Metrics (2025)
Comparison of trade and investment figures between the US and Sri Lanka.
Primary Sources
FEATURE - Tariff Wars: How Will the US Reciprocal Tariff Impact Sri Lanka?
News By Dr Asanka Wijesinghe, Institute of Policy Studies The proposed additional tariffs on the US imports from Canada, China, and Mexico went into effect early Tuesday morning (March 4), paving the way for a trade war between the US and major trade partners. In addition, the Presidential Memorandum on Reciprocal Trade and Tariff of the United States (US) has called for studies on the “unfair trade practices” of US trade partners to determine reciprocal tariff rates as a counter measure. This means that, if the EU has a 10% automobile tariff, the US reciprocal tariff would also be 10%, matching its trade partner’s tariff. With the US having roughly about 13,000 tariff lines, 200 trading partners, and about 2.6 million individual tariff rates, if the proposed reciprocal tariffs are fully implemented, this complex tariff system may have unprecedented effects on the global economy. This could then potentially lead to retaliation from trade partners. The threat of reciprocal tariffs could also potentially cause a trade war between the European Union (EU) and the US with the EU likely to decrease imports from countries like Sri Lanka, making sustainable export growth in a more protectionist global economy more difficult for countries like Sri Lanka. Tariff threats are also being used as a bargaining tool and the US may revise high tariffs in exchange for concessions from major trade partners. The possible disintegration of the current global free trade system, which may be inevitable if the US implements broad-based tariff hikes, is a great and immediate concern for Sri Lanka, as it is a small economy with limited domestic demand and a high dependency on external value chains. Given that the US accounts for a quarter of exports from Sri Lanka, if the US government goes ahead with reciprocal tariffs, how would said reciprocal tariffs impact Sri Lanka’s exports? Reciprocal tariff rates: How will the US determine these rates? The Office of the US Trade Representative (USTR) lists various policies as “unfair trade practices,” providing flexibility for the US authorities to determine the reciprocal tariff rate. These include high tariffs, value-added taxes, non-tariff barriers, subsidies, burdensome regulatory requirements, exchange rate interventions, and any other practice deemed by the USTR. The US plans to complete all the studies on “unfair trade practices” by April 1, 2025. The flexible definition of what constitutes unfair practices and the inclusi...
US pushes for deeper two-way trade and investment flows with Sri Lanka
The United States is seeking a recalibration of its economic engagement with Sri Lanka, pushing for stronger two-way trade flows and greater reciprocity as the island’s post-crisis recovery improves investor confidence.Speaking at a recent AmCham CEO Forum in Colombo, US Embassy Economic Unit Chief Zachary Bailey said US businesses are increasingly optimistic about Sri Lanka’s trajectory, but signalled a clear expectation for deeper commercial integration, including higher imports of US goods and outbound Sri Lankan investment into the United States. “There has been a remarkable transformation since the financial crisis,” he said, noting that US firms operating in Sri Lanka are “a lot happier today than they were a few years ago” and expressing “cautious optimism” about the market outlook. Against that backdrop, Bailey said the next phase of engagement must move beyond traditional patterns where developed economies tolerated trade asymmetries with developing markets. That approach, historically rooted in development considerations, is now shifting toward a more reciprocal framework, particularly following changes in US trade policy thinking in recent years.“We would also really like to see more US exports coming to Sri Lanka,” he said, pointing to sectors ranging from agricultural commodities to machinery and pharmaceuticals. The US is Sri Lanka’s largest export market accounting for $ 3 billion in 2025 out of a total $ 17.2 billion export earnings that year. The US accounted for just 2% of the $ 1 billion total FDIs in 2025.He noted that the US has historically run trade deficits with Sri Lanka and argued there is scope to expand market access for American products while strengthening overall commercial ties. At the same time, Bailey emphasised that the relationship must be two-directional, with Sri Lankan firms encouraged to explore investment opportunities in the United States.“I also want to talk about the other way around, for Sri Lankan companies to invest in the United States and deepen that two-way trade relationship,” he said, adding that US agencies are open to facilitating such discussions. Despite improved sentiment, he cautioned that Sri Lanka must address structural issues to remain competitive in attracting global capital.US investors, he said, are primarily focused on regulatory consistency, tax clarity, customs processes and ease of doing business, alongside broader macroeconomic stability.“They want to be able to plan one year out, five y...
Sri Lanka slapped with 44 per cent Trump reciprocal tarrif; CSE apparel ...
The tariff decision comes as the United States remains Sri Lanka's largest export market, accounting for 23% of its total merchandise exports. In 2024, total U.S.-Sri Lanka goods trade was valued at $3.4 billion, with U.S. imports from Sri Lanka rising 6.1% to $3.0 billion and exports increasing 4.9% to $368.2 million.
Sri Lanka, Russia hold talks to expand trade, energy and tourism ties
Sri Lanka and Russia also agreed to set a benchmark to increase bilateral trade and raise economic engagement between the two countries. The issue of Sri Lankan ex-servicemen serving in the Russian military was also discussed during the consultations.
