The United States will impose a 15% tariff on all imports from Nicaragua not covered by the Dominican Republic-Central America Free Trade Agreement, the Office of the U.S. Trade Representative said on Wednesday.
The tariff will be phased in over two years, starting at 10% on Jan. 1, 2027, and rising to 15% on Jan. 1, 2028, the USTR said. The levy announcement followed a Section 301 investigation that began last December. The duty will stack on existing tariffs, such as the 18% reciprocal levy goods from Nicaragua currently face, per a USTR press release.
"Specifically, limiting the tariffs to goods that are not originating under CAFTA-DR should limit the impact on U.S. exports to Nicaragua and U.S. companies producing in Nicaragua, while providing increasing pressure on Nicaragua to eliminate its acts, policies, and practices," the USTR said.
The agency’s investigation found that Nicaragua engaged in increasingly pervasive abuses of labor and human rights while systematically dismantling rule of law protections against arbitrary government action, according to the USTR. Offenses included seizing assets, allowing child labor, imposing arbitrary fines and revoking the legal status of business organizations.
In October, the Trump administration proposed 100% tariffs on imports from Nicaragua, based on the Section 301 probe findings. At the time, the Office of the USTR requested comments on whether to impose duties or withdraw concessions on certain sectors.
This is the latest instance of President Donald Trump using Section 301 of the Trade Act of 1974 as a tool against trading partners. He employed the statute to enact tariffs on imports from China during his first term, which former President Joe Biden maintained.
Earlier this year, Trump began investigating Brazil under Section 301 to examine whether the country’s policies harm or restrict U.S. commerce. At the time, Trump said the U.S. would charge a 50% tariff on imports from Brazil starting Aug. 1.
