The U.S. will gradually increase tariffs over the next two years on Nicaraguan exports that don’t fall under a regional free trade agreement, the Office of the U.S. Trade Representative said Wednesday.
The tariffs are the result of a year-long probe launched under the Biden administration into Nicaragua’s labor and human rights abuses. The investigation sought to determine whether abuses undermine rule of law in the country and whether it could have commercial implications for U.S. businesses.
“Nicaragua’s acts, policies, and practices are unreasonable and burden or restrict U.S. commerce,” USTR has concluded, according to a statement.
Beginning Jan. 1, 2027, tariffs on all Nicaraguan exports not covered by the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) will be subject to a 10% tariff, which will rise to 15% a year later.
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The tariffs will also stack on top of the country's 18% so-called reciprocal tariff rate that kicked in in August, USTR says.
Nicaragua’s main agricultural exports to the U.S. are rolled tobacco, coffee and beef, according to the Observatory of Economic Complexity, with 2023 exports topping $350 million, $300 million, and $170 million, respectively. The CAFTA-DR agreement covers most agricultural trade between the two countries, however.
The U.S. sent more than $522 million worth of ag exports to Nicaragua last year, USDA data shows, including almost $100 million of soybean meal, $72 million of rice, and $64 million of corn.
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