Sri Lanka Welcomes US Tariff Cut But Eyes Further Relief

Colombo: Sri Lanka welcomed Thursday a sharp cut in US tariffs on its exports, but said it would seek further reductions as Washington pushes for trade deals.

US President Donald Trump sent letters to seven trading partners on Wednesday setting out new tariff rates that would take effect on August 1 in addition to existing duties.

Some partners received notably lower rates from those originally threatened, with Sri Lanka seeing the sharpest reduction -- down from 44 percent announced in April to 30 percent.

"We recognise we have made significant progress in the process so far," Sri Lanka's central bank governor Nandalal Weerasinghe said.

"But we need to make more progress."

Weerasinghe, who is part of the team that negotiated with the US trade representative's office, said Colombo expects to continue talks.

He did not specify a target rate for Sri Lanka's nearly $3-billion annual exports to the United States, most of which are garments.

Sri Lankan officials said there was no plan to immediately respond to Trump's letter to President Anura Kumara Dissanayake.

Duminda Hulangamuwa, senior economic advisor to Dissanayake, said negotiations with Washington were aimed at ensuring Sri Lanka did not lose its competitive advantage over rival garment producers including India, Bangladesh, Vietnam, and Cambodia.

Bangladesh, which is a much larger garment exporter, was hit with a 35-percent tariff.

Smaller competitor Cambodia was charged 36 percent, but Vietnam faces a much lower rate of 20 percent.

India is currently placed at 26 percent.

Sri Lanka's garment manufacturers have said higher tariffs -- on top of existing customs duties reaching 25 percent -- could slash demand and threaten about 50,000 jobs in a sector employing 300,000 people, mainly women.

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