Sri Lanka, July 10 -- The reduction in US reciprocal tariff on exports from Sri Lanka to 30% from previously announced 44% is positive news for local businesses, however the rate is a substantial increase from the existing 10% duty, Economist Dhananath Fernando stated.

Fernando noted with the increase in the tariff rate, the consumer spending in the US will see a notable drop which will result in the reduction in demand for imported products.

Therefore, the new tariff will reduce the export volume of Sri Lanka which has also been highlighted by the World Bank in a recent report, economist Dhananath Fernando said.

According to Fernando, the real challenge Sri Lanka faces is the tariff imposed by the US on its competitors such as India, ...