WASHINGTON – Today, the United States Trade Representative took 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, abuses of human rights and fundamental freedoms, and dismantling of the rule of law.
Today’s responsive action follows the Office of the United States Trade Representative’s (USTR’s) determination that Nicaragua’s acts, policies, and practices are unreasonable and burden or restrict U.S. commerce, taking into account over 2,000 public comments and consulting with government agency experts and USTR cleared advisors.
Effective January 1, 2026, the United States will impose a tariff that is phased-in over two 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 would stack with others such as the existing 18 percent Reciprocal Tariff. Further, should Nicaragua show a lack of progress in addressing these issues, this timeline and these rates may be modified.
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.
To view the Federal Register Notice, click here.
Background
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.
On December 10, 2024, pursuant to Section 302(b)(1) of the Trade Act, after receiving the advice of the Section 301 Committee and advisory committees, the United States Trade Representative determined to initiate an investigation regarding Nicaragua’s acts, policies, and practices related to labor rights, human rights, and the rule of law.
Pursuant to Section 304(b)(1)(A) of the Trade Act, USTR provided the public and interested persons with opportunities to present their views through a public comment process and through a public hearing. USTR received witness testimony and more than 160 comments and rebuttal comments. The investigation also elicited testimony evidencing certain gross violations of human rights which USTR is referring to the U.S. Department of State for further investigation, action, and advocacy on those issues.
On October 20, 2025, the United States Trade Representative 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. The United States Trade Representative proposed a range of responsive actions and invited the public to provide written comments by November 19, 2025, on the proposed action. USTR received over 2,000 written comments.
A copy of the Federal Register Notice setting out the U.S. Trade Representative’s determination and action is available here.
A copy of the USTR Report is available here.
###
