Tariff Wars: How Will the US Reciprocal Tariff Impact Sri Lanka?
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.
GSP+: Can It Drive Inclusive Growth In Sri Lanka?
In a mid-October 2024 meeting with the European Union (EU) Ambassador, Sri Lanka reaffirmed its commitment to strengthening trade relations with the EU, particularly highlighting the role of the GSP+ programme in boosting Sri Lankan exports. This discussion underscores the significance of the GSP+, which offers tariff preferences for Sri Lanka’s exports to the EU. The GSP+ offers reduced tariffs on exports, conditional upon the recipient countries implementing 27 international conventions. These conventions include standards on labour and human rights, environmental sustainability, and good governance. Sri Lanka’s major exports to the EU, such as wearing apparel, employ low and medium-skilled, and female workers, as well as estate and rural sector workers, directing benefits of GSP+ to vulnerable communities.
US Election Outcomes And Trade Policy Changes: What It Means For Sri Lanka
Now that the United States (US) election has concluded, what direction will the US’s trade policy be headed? This is one of the burning questions that many of its trading partners are asking in the aftermath of the presidential election. A costly trade war was the outcome of the tariff hikes in 2018 – under the first term of President Trump – which was followed by retaliatory tariffs from the US’s trade partners. Elected for a second term, he is once again proposing significant tariff increases as trade policy measures. These potential changes in US tariff policies will have a direct impact on Sri Lanka’s export industries. The economic justification for a global tariff on imports and its efficacy in achieving the expected results – such as the reshoring of manufacturing employment to the US and price reduction – remains uncertain. This article mainly focuses on the adverse impacts of a potential tariff increase on Sri Lanka’s exports to the US.
Sri Lanka’s Road to Global Competitiveness: Insights from Trade, Energy, and Agriculture Policies
Can targeted reforms in trade, energy, and agriculture provide the boost needed for recovery? This was the focus of the third session of the IPS annual report launch, Sri Lanka: State of the Economy 2024 under the theme “Economic Scars of Multiple Crises: From Data to Policy”. The session, titled ‘Regulatory Policies: Will They Help to Successfully Compete Globally?’, explored how regulatory policies in these critical sectors can help the country improve its global competitiveness.
Between Homefront Policies and Global Developments: Sri Lanka’s External Sector Outlook
Having weathered a challenging period marked by a deep economic crisis, Sri Lanka is now demonstrating positive signs of an economic upturn. Still, amidst limited homefront policy alternatives against an unfavourable global backdrop, a critical question arises: how will Sri Lanka’s external sector cope in the face of these challenges?
Notably, import controls, initially imposed in response to the dearth of foreign exchange liquidity in the domestic market, are being largely eased. The government is actively seeking to forge partnerships with regional giants, aiming to strengthen trade relations through Free Trade Agreements (FTAs). Nevertheless, in the broader global context, the rise of geopolitical rivalries, slow growth and contracting demand in key markets create multiple uncertainties for Sri Lanka’s external sector recovery.
Demystifying Hawala/Undiyal – The Not So Dismal Science:[…] believed that informal fund transfer operations in Sri Lanka have expanded considerably due to the wide gap between the…