On December 10, 2025, the Office of the United States Trade Representative (USTR) issued a Federal Register notice announcing actions under Section 301 of the Trade Act of 1974 to address Nicaragua’s acts, policies, and practices related to abuses of labor rights, abuses of human rights and fundamental freedoms, and the dismantling of the rule of law. Effective January 1, 2026, the United States will impose a tariff that is phased-in over three years on all imported Nicaraguan goods that are not originating under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR).
The tariff will be set at zero percent on January 1, 2026 and will increase to 10 percent on January 1, 2027, and to 15 percent on January 1, 2028. Any tariff will stack with others, such as the existing 18 percent reciprocal tariff on Nicaragua. Should Nicaragua show a lack of progress in addressing these issues, the USTR states that this timeline and these rates may be modified.
These actions against Nicaragua come after the USTR determined in October 2025 that such acts, policies, and practices are unreasonable and burden or restrict U.S. commerce, and that Nicaragua has “exploited its own workers resulting in unfair conditions of competition, confiscated the property interests of domestic and foreign religious institutions and U.S. persons or businesses, and created a high-risk environment for U.S. companies investing and conducting business in the country.” In seeking public comments on possible actions to take, the USTR received more than 2,000 responses and notes that it will continue to monitor the effects of this trade action and the progress made toward resolution of this matter.
For additional background, see Thompson Hine Updates of October 22, 2025 and December 11, 2024.