U.S. Imposes Phased-In Duties on Certain Nicaraguan Imports

Dec. 23, 2025
By: Chaney A. Finn

Under Section 301 the United States Trade Representative (USTR) has been investigating certain practices of the Nicaraguan government, including a finding in October that severe labor rights abuses, human rights violations (like child labor, forced labor, union suppression), and erosion of the rule of law, unfairly burdened U.S. commerce.

As a consequence of those findings the USTR has announced a phased-in duty regime for certain Nicaraguan imports. Nicaraguan goods imported into the U.S. that do not qualify as originating under the Dominican Republic-Central America-United States Free Trade Agreement (“CAFTA-DR” and not DR-CAFTA, for some reason) are subject to 15% tariffs by 2028. Tariffs will be phased in starting at 0% in January 2026, rising to 10% in 2027, and 15% in 2028, aiming to pressure Nicaragua to reform while allowing businesses time to adapt.

Effective 12:01 a.m. Eastern time on January 1, 2026, new HTSUS heading 9903.89.01 is to be assigned on entry lines to products of Nicaragua covered by the Annex of the Federal Register notice. The notice should be reviewed, but it contains provisions similar to those in other Section 301 cases, including exemptions for certain Chapter 98 provisions, the applicability of reciprocal and 301 duties on the same shipments, and continuing AD/CVD coverage (where applicable).

Tariffs are subject to change as the USTR will continue to monitor the effects of the trade action and the progress made toward resolution of this matter. The USTR will also continue to examine the efficacy of these actions and take additional action if it is determined that additional leverage is needed to encourage Nicaragua to eliminate the investigated acts, policies, and practices. This may be especially relevant if the Supreme Court strikes down IEEPA duties that would have otherwise applied to Nicaraguan articles.

Should you have any questions regarding CAFTA-DR qualification, tariffs,  duties, or any other trade-related questions, do not hesitate to contact any attorney at Barnes Richardson and Colburn.