A proposal by the United States to impose an additional 12.5% duty on imports from Sri Lanka could create new challenges for exporters at a time when the country is seeking to expand foreign exchange earnings and strengthen its export sector.
The proposal, announced by the Office of the United States Trade Representative (USTR), forms part of a broader trade investigation involving 60 economies. The USTR has proposed additional duties on countries it believes have failed to adequately address the importation of goods made using forced labour.
According to the USTR, Sri Lanka was among the countries identified as having failed to impose and effectively enforce a prohibition on forced labour imports. As a result, the agency has proposed a 12.5% additional duty on goods imported from Sri Lanka into the United States.
While the measure is still at the proposal stage and remains subject to a public consultation process, it has the potential to affect exporters if implemented.
The United States remains one of the country’s most important export destinations, particularly for apparel and textile products. Any increase in import duties could affect the competitiveness of goods in the US market by increasing costs for buyers and importers.
The timing is also important. Sri Lanka has been focusing heavily on export growth as part of its broader economic recovery strategy. Higher export earnings are viewed as essential for generating foreign exchange, supporting economic growth, and reducing external sector vulnerabilities.
One area that may receive close attention is the apparel sector, which remains one of the country’s largest export industries and a major source of employment. Although the USTR has proposed a separate textile mechanism that could allow certain apparel and textile imports to enter the US at reduced tariff rates, details of the programme have not yet been released.
The proposal also highlights a broader trend in international trade policy. Labour standards, sustainability requirements, and supply chain compliance are increasingly becoming factors that influence market access in major economies. Exporters are facing growing pressure to demonstrate compliance with international standards beyond traditional product quality requirements.
For Sri Lanka, the immediate impact remains uncertain because the proposal has not yet been finalized. The USTR is currently accepting public comments and is expected to hold a hearing before making a final determination.
However, the development serves as a reminder that trade competitiveness today is influenced not only by pricing and production capacity but also by compliance with evolving international trade and labour standards.
As the consultation process moves forward, exporters and policymakers are likely to closely monitor the outcome, given the importance of the US market to Sri Lanka’s export sector and foreign exchange earnings.
Last modified: June 4, 2026
