USTR announces phased-in tariff on imported Nicaraguan goods
The United States will implement a phased-in tariff on Nicaraguan goods not covered by CAFTA-DR, starting January 1, 2026.
The Office of the United States Trade Representative (USTR) today released a notice announcing targeted action under Section 301 of the Trade Act of 1974 to address Nicaragua’s acts, policies, and practices related to abuses of labor rights, human rights, fundamental freedoms, and the dismantling of the rule of law.
A related USTR release explains that the United States will impose a phased-in tariff on all imported Nicaraguan goods not originating under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). The tariff will start at 0% on January 1, 2026, increase to 10% on January 1, 2027, and reach 15% on January 1, 2028. Any tariff would stack with others, such as the existing 18% reciprocal tariff.
Background
The USTR in December 2024 decided to initiate an investigation regarding Nicaragua’s acts, policies, and practices related to labor rights, human rights, and the rule of law. Read TradeNewsFlash
In October 2025, the USTR determined that Nicaragua’s acts, policies, and practices related to labor rights, human rights and fundamental freedoms, and the rule of law are unreasonable and burden or restrict U.S. commerce, and thus are actionable under Section 301(b)(1) of the Trade Act of 1974. The USTR proposed a range of responsive actions and invited the public to provide comments on the proposed action. Read TradeNewsFlash