USTR Proposes Tariffs Up to 100% on Nicaraguan Goods, Weighs CAFTA-DR Suspension

Overview

• The U.S. Trade Representative’s determination under Section 301 found pervasive labor and human-rights abuses by Nicaragua’s Ortega-Murillo government, including child and forced labor, human trafficking, suppression of unions, arbitrary arrests, and stripping union members of citizenship.
• Proposed remedies include tariffs of up to 100% on some or all Nicaraguan goods and the suspension of all or part of the country’s CAFTA-DR preferences, with options for immediate effect or a 12-month phase-in.
• If both higher tariffs and the loss of CAFTA-DR benefits are imposed, effective U.S. duties could exceed 100% as products revert to Most-Favored-Nation rates.
• USTR is soliciting input from industry and the public through Nov. 19, and President Donald Trump will decide which measures to implement.
• Nicaragua exported $4.6 billion to the U.S. in 2024, yielding a $1.9 billion U.S. trade deficit, and industry groups warn that broad penalties could disrupt integrated CAFTA-DR apparel and textile supply chains.