Q24N (Confidencial) The Office of the United States Trade Representative (USTR) proposed a series of measures, including the full or partial suspension of benefits for Nicaragua under the DR-CAFTA Free Trade Agreement and the imposition of tariffs of up to 100% on its exports.
The measures are proposed in response to “the laws, policies, and practices” of the Daniel Ortega and Rosario Murillo regime in Nicaragua, related to labor rights abuses, abuses of human rights and fundamental freedoms, and the dismantling of the rule of law.”
In the United States’ view, these acts “are unreasonable” and constitute a “burden or restrict U.S. commerce.”
“Section 301 authorizes the Trade Representative to take all appropriate and feasible actions, subject to the direction of the President, to achieve the elimination of such acts, policies, and practices,” the resolution states.
The Trade Representative decided to open a consultation period on the proposed actions before November 19, 2025. The approved measure(s) are expected to take effect in January 2026.
The proposed scenarios
The Trade Representative’s proposal establishes two possible scenarios for Nicaragua, in which Nicaraguan trade with the United States is fully or partially penalized.
- Suspend Nicaragua from all benefits of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), including tariff concessions and Nicaraguan content accumulation for other CAFTA-DR partners, immediately or gradually over a period of up to 12 months.
- Suspend Nicaragua from some benefits of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), including tariff concessions and
- Nicaraguan content accumulation for other CAFTA-DR partners, immediately or gradually over a period of up to 12 months.
- Apply tariffs of up to 100% to all Nicaraguan imports, either immediately or gradually over a period of up to 12 months.
- Apply tariffs of up to 100% to some Nicaraguan imports immediately, with tariffs for selected sectors to be phased in gradually over a period of up to 12 months.
An investigation that began in 2024
The U.S. Trade Office’s determination closes an investigation initiated on December 10, 2024, during the administration of former President Joe Biden.
This process included more than 160 public comments and testimony from experts, organizations, and citizens, as well as evidence of “serious human rights violations.” A public hearing was also convened on January 16, 2025, during which witnesses testified and answered questions.
A Scenario Posed in Early 2025
The United States Special Envoy for Latin America, Mauricio Claver-Carone, declared in January 2025 that the United States is not interested in having Nicaragua as a trading partner, and is therefore seeking “options” with its allies in the region to expel the country from the Dominican Republic-United States-Central America Free Trade Agreement (DR-CAFTA), in force since 2004.
“That’s absurd, it’s absurd,” Claver-Carone asserted while explaining that his country’s strategy is to work with US allies on ways to remove Nicaragua from this agreement without affecting the rest of the countries. Echoing the rhetoric of US President Donald Trump, the special envoy said that “that agreement was negotiated and enacted very poorly.”
In February 2025, U.S. Secretary of State Marco Rubio called Cuba, Nicaragua, and Venezuela “enemies of humanity” and accused them of causing the migration crisis in the hemisphere.
“These three regimes that exist: Nicaragua, Venezuela, and Cuba are enemies of humanity and have created a migration crisis. If it weren’t for those three regimes, there wouldn’t be a migration crisis in the hemisphere,” Rubio said at a press conference in San José, accompanied by Costa Rican President Rodrigo Chaves.
This article is a translated and adapted version of “EE. UU. propone suspender a Nicaragua del CAFTA y aplicar aranceles del 100%” originally published on Confidencial.Digital. You can read the original Spanish version here.