In a key boost for Sri Lankan exporters, the United States has officially reduced the tariff rate on Sri Lankan goods to 20%, down from the previously imposed 30% under Executive Order 14257.
The revision was announced through a new presidential directive issued on July 31, following several months of bilateral trade discussions. The U.S. cited Sri Lanka’s “meaningful trade and security commitments” as a key factor in the decision, placing the country among a group of nations that successfully negotiated improved trade terms.
The updated tariff rate will come into effect on August 7, 2025—seven days after the order’s issuance. However, shipments already in transit before that date will be exempt from the new rate structure.
With this move, Sri Lanka aligns with regional export competitors such as Vietnam and Bangladesh, who now face the same 20% tariff rate. India will continue under a 25% rate, while Pakistan and Indonesia have secured slightly more favorable terms at 19%, offering them a slight edge in certain product segments.
The executive order also introduces strict anti-transshipment provisions. A punitive 40% tariff will be imposed on any goods found to be rerouted through third countries to bypass U.S. duties. Sri Lankan apparel exporters—many of whom rely on transshipment routes—are advised to adhere closely to U.S. customs regulations to avoid penalties.
