The Office of the U.S. Trade Representative (USTR) announced on December 10, 2025, the authorization of Section 301 tariffs on Nicaragua products, excluding those originating under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), citing the country’s continued human rights abuses and disregard for rule of law.

USTR said it based this action after “taking into account over 2,000 public comments and consulting with government agency experts and USTR cleared advisors.”

The tariff will be set at 0% on January 1, 2026, and will increase to 10% on January  1, 2027, and to 15% on January 1, 2028. Any tariff would stack with others such as the existing 18% Reciprocal Tariff. Further, should Nicaragua show a lack of progress in addressing these issues, this timeline and these rates may be modified, USTR said.

“This action balances the need for action and the importance of limiting disruption for U.S. businesses. Pursuant to Section 305(a) of the Trade Act (19 U.S.C. 2415(a)(1)), USTR will issue a subsequent notice to implement this action,” the agency added.

The Federal Register notice is available here, while a copy of the October 20, 2025 USTR Report can be viewed here.

Section 301 of the Trade Act of 1974, as amended (Trade Act), is designed to address unfair foreign practices affecting U.S. commerce. Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government practices that burden or restrict U.S. commerce. A Section 301(b) investigation examines whether the acts, policies, or practices are unreasonable or discriminatory and burden or restrict U.S. commerce.

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