Repeal PTA now to save exports..

It was no surprise to see the Trump Administration raising tariffs.

- By Rohan Samarajiva

What no one expected was how big and how irrational they would be. Countries with zero tariffs on imports such as Singapore and Switzerland were being slapped with tariffs. Territories with no inhabitants were subjected to punitive tariffs on their non-existent exports based on an irrational formula that has nothing to do with tariffs, designed solely to reduce bilateral trade deficits.

Shortly after the US Presidential election in November, I casually asked a senior official of the Foreign Ministry what was being done to face the oncoming storm. Little or nothing, I found. The apparel exporters were studying options, I was told.

“Phenomenal” concessions?

There is no point in blaming the government at this stage. What’s past is past. In any case, rational, evidence-based arguments carry no weight in Washington these days. If the issue was really about Sri Lanka’s tariffs and para-tariffs, reducing them would make sense. But the formula used to derive the 44 percent tariff indicates that the objective is not the tariff reduction, but the reduction of the US trade deficit with Sri Lanka. This requires a seven-fold increase in imports from the US.