On Dec. 10, 2025, the U.S. Trade Representative (USTR) announced that it will impose a new tariff on products from Nicaragua that will be phased in over the next two years from zero to 15 percent by Jan. 1, 2028. The stated rationale for the new tariff is USTR’s finding that Nicaragua’s abuses of labor rights, human rights, and fundamental freedoms, and dismantling of the rule of law are unreasonable and burden or restrict U.S. commerce by creating unfair competition against U.S. workers and businesses. 

The new tariff will apply to all imported Nicaraguan goods that are not originating under the Dominican Republic–Central America–United States Free Trade Agreement (CAFTA-DR). Additionally, the Section 301 tariff would stack with others such as the existing eighteen percent IEEPA Reciprocal Tariff. Finally, USTR left open the possibility that these rates and timelines may be modified should “Nicaragua show a lack of progress in addressing these issues.”

USTR’s phased-in tariff approach is intended to limit the potential for disruption to U.S. businesses. The starting point will be a zero percent tariff on Jan. 1, 2026. That will increase to 10 percent on Jan. 1, 2027, and to 15 percent on Jan. 1, 2028. As such, importers and others relying upon products from Nicaragua should evaluate their supply chains and consider the potential impact this action may have on their imports.