In a return to more “traditional” tariff authorities, on Oct. 20, 2025, the United States Trade Representative (USTR) announced that 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 are unreasonable and burden to restrict U.S. commerce.” This determination was made under Section 301 of the Trade Act of 1974. Section 301 of the Trade Act of 1974 is designed to address unfair foreign practices affecting U.S. commerce.

As background, on Dec. 10, 2024, the USTR initiated an investigation regarding Nicaragua’s acts, policies and practices after receiving advice from the Section 301 Committee and advisory committees.

As a result of the investigation, the USTR has opened a public comment period for the public to submit written comments by Nov. 19, 2025, on the proposed action.  Some of the proposed actions to be taken as a result of the determination include suspending all CAFTA-DR (the Dominican Republic–Central America–United States Free Trade Agreement) benefits to Nicaragua and applying tariffs of up to 100 percent on all Nicaraguan imports.  In comments, interested parties should consider addressing whether imposing the proposed actions would be practicable or effective to obtain the elimination of Nicaragua’s practices or if it would cause disproportionate economic harm to U.S. interests, in particular to small or medium-sized businesses and consumers.