Sri Lanka may be part of a broader deal the US will have with other small trading partners on tariffs, while the 90-day pause by the Trump Administration may be extended with the court ruling, an analyst said.
Speaking to The Daily Morning Business, Frontier Research Macroeconomic Advisory Head Chayu Damsinghe said that the ruling by the Manhattan Court of International Trade will make negotiations with major trading partners complicated, which will result in the 90-day pause on reciprocal tariffs getting extended beyond the 9 July deadline.
“What I am expecting is that smaller countries like Sri Lanka might get some broad deal, which might not be too different from country to country because there is no time to actually negotiate all the specifics,” Damsinghe said.
A panel of three judges at the US Court of International Trade in Manhattan issued a unanimous ruling Wednesday (28) which sided with 12 US states and small businesses that accused President Donald Trump of wrongfully invoking an emergency law to justify the bulk of his levies.
The court gave the administration 10 days to “effectuate” its order.
The order applies to Trump’s global flat tariff, elevated rates on China and others, and his fentanyl-related tariffs on China, Canada and Mexico.
Other tariffs imposed under different powers, like so-called Section 232 and Section 301 levies, are unaffected, and include the tariffs on steel, aluminium and automobiles.
However, the court noted that Trump retains more limited power to impose tariffs to address trade deficits under another statute, the Trade Act of 1974. But that law restricts tariffs to 15% and only for 150 days with countries with which the United States runs big trade deficits.
Further, Damsinghe said that Sri Lanka will not be able to get back to the 10% tariff it had earlier or even below, when a country like the UK has a 10% tariff.
On Wednesday, a team led by the Deputy Minister of Finance and Planning, Dr Harshana Suriyyaperuma and Central Bank Governor Dr Nandalal Weerasinghe met for the second round of talks on tariffs with the Trade Representative’s Office in Washington D. C.
