USTR proposed actions against Nicaragua following Section 301 investigation
Suspension of benefits under trade agreement; additional 100% duties on products imported from Nicaragua
The Office of the United States Trade Representative (USTR) has determined that Nicaragua’s acts, policies, and practices related to labor rights, human rights, fundamental freedoms, and the rule of law are unreasonable and burden or restrict U.S. commerce, making them actionable under Section 301 of the Trade Act of 1974.
Therefore, the USTR is proposing several actions, including:
- Suspending or withdrawing all or some benefits of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) for Nicaragua, including tariff concessions and cumulation of Nicaraguan content for other CAFTA-DR partners, either immediately or phased in over up to 12 months.
- Imposing additional duties of up to 100% on some or all products imported from Nicaragua, either immediately or phased in over up to 12 months.
Read the USTR notice
The USTR is requesting public comments on these proposed actions, particularly regarding the suspension of CAFTA-DR benefits and the application and timing of increased tariffs on Nicaraguan imports. Comments must be submitted by November 19, 2025
Background
The investigation into Nicaragua’s conduct began on December 10, 2024, following concerns about pervasive abuses of labor rights and human rights, as well as the systematic dismantling of rule of law protections. The USTR sought public input, receiving over 160 written comments and convening a public hearing on January 16, 2025. Despite a request for consultations, the government of Nicaragua declined to participate. Based on the evidence gathered, including public submissions and testimony, the USTR and the Section 301 Committee prepared a comprehensive report supporting the determination that Nicaragua’s actions are unreasonable and restrict U.S. commerce.
The Section 301 report (October 20, 2025) details a range of abuses including repression of freedom of association and collective bargaining, interference in worker and employer organizations, asset seizures, removal of citizenship, arbitrary dismissals and arrests, child and forced labor, human trafficking, and workplace abuses such as wage theft and retaliation. The government has also imposed arbitrary fines, taxes, and customs rulings, revoked the legal status of business organizations, and seized property interests without legal recourse.
According to the report, these acts have resulted in unfair competition, lost sales and exports for U.S. enterprises, diminished investment opportunities, and a high-risk environment for U.S. companies operating in Nicaragua. The exploitation of workers suppresses wages and leads to artificially low-cost Nicaraguan products, harming U.S. workers and businesses. Attacks on religious freedom and the dismantling of rule of law protections have further discouraged investment and business activity.