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Major Blow: US imposes 44% Tax on Sri Lankan Goods

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US President Donald Trump has issued an executive order imposing a 44 percent tariff on Sri Lankan goods, citing it as a reciprocal measure to what he described as the 88 percent in taxes and trade barriers imposed by Sri Lanka on the United States.

The United States remained Sri Lanka’s largest export destination, accounting for 23% of total merchandise exports.

U.S. total goods trade with Sri Lanka were an estimated $3.4 billion in 2024. U.S. goods exports to Sri Lanka in 2024 were $368.2 million, up 4.9 percent ($17.1 million) from 2023. U.S. goods imports from Sri Lanka totaled $3.0 billion in 2024, up 6.1 percent ($173.5 million) from 2023. The U.S. goods trade deficit with Sri Lanka was $2.6 billion in 2024, a 6.3 percent increase ($156.4 million) over 2023.

Sri Lanka’s main export products to United States in 2023 were Men’s and Women’s Under Garments, Women’s Outerwear, Men’s Outerwear, Pneumatic & Retreated Rubber Tyres & Tubes, T-shirts, Gloves, Mitts & Mittens of Textile, Warm Cloths (Jerseys, Pullovers etc), Motor Vehicles & Parts, Active wear/Sportswear, and Babies’ Garments.

Economy

Cabinet approves electrification of key railway corridors in Sri Lanka

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The Cabinet of Ministers has approved a proposal to electrify key railway corridors in Sri Lanka as part of a long‑term transport modernization strategy.

Corridors with high commuter density have been prioritized for electrification, with support expected from international development institutions.

Currently, most railway operations rely on diesel power, and officials have highlighted the need to upgrade tracks, signaling systems, and related infrastructure to improve efficiency and reliability.

The government’s new programme focuses on constructing additional lines, building double tracks, modernizing signals, and introducing electrification to create a modern rail transport system.

According to the government, the initiative aims to expand passenger capacity, reduce travel times, and contribute to an environmentally friendly and sustainable public transport service.

The Cabinet approved the proposal presented by the Minister of Transport to begin electrification in the following routes:

Main Line — Maradana to Ragama, including station upgrades at Gampaha, Veyangoda, Mirigama, and Polgahawela.

Kelani Valley Line — Maradana to Makumbura.

Coastal Line — Maradana to Panadura

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Economy

Sri Lanka Exports Rise 6% Despite Global Challenges

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Export Development Board (EDB) says that despite the global economic difficulties arising from the military conflicts in the Middle East, the country’s exports have shown a six percent growth during the first four months of this year compared to 2025.

The Chairman of the Export Development Board Mangala Wijesinghe said that, given this trend, there is a strong possibility of exceeding last year’s revenue targets, which already represented the highest export revenue in the country’s history.

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Economy

Sri Lanka Plans 20 New Tourist Zones as Visitor Numbers Surge

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Sri Lanka is set to expand its tourism footprint with plans to officially gazette 20 new tourist zones before November, in a move aimed at accelerating visitor arrivals and strengthening the country’s appeal as a global travel destination.

Chairman of the Sri Lanka Tourism Development Authority, Buddhika Hewawasam, confirmed that the process to designate the new tourism zones is already underway and will be completed before November. 

The latest move comes amid a steady rebound in Sri Lanka’s tourism sector, with figures indicating strong growth in arrivals so far this year. 

According to available data, a total of 1,076,487 tourists have visited the country during the period under review.

India has emerged as the leading source market for Sri Lanka’s tourism industry, contributing the highest number of visitors. 

A total of 272,099 Indian tourists have arrived in the country, so far.

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