By: Brian Walczyk, Compliance Manager, TradeInsights, LCB, CCS

On December 12th the U.S. Trade Representative (USTR) published its Sec 301 Notice of Action on Nicaragua’s acts, policies, and practices related to abuses of labor rights, human rights and fundamental freedoms, and dismantling of the rule of law. These findings are said to be unreasonable and are a burden or further restrict U.S. commerce.

The actions will apply to any good from Nicaragua that does not qualify for preferential treatment under the Dominican Republic-Central America – United Stats Free Trade Agreement (CAFTA-DR):

• 0% tariff to be applied on Jan 1, 2026
• 10% tariff to be applied on Jan 1, 2027
• 15% tariff to be applied on Jan 1, 2028

The tariffs will “stack” with others such as the current IEEPA Reciprocal tariff of 18%. Should Nicaragua show a lack of progress addressing the issues pursuant to the investigation and notice of action, the USTR may adjust the timelines and rates as deemed appropriate.

We will continue to monitor this situation and issue updates as needed. Please contact your V. Alexander account team, or you may also contact our Trade Compliance team at tradeinsights@valexander.com with any questions, and you can always follow us on our website www.valexander.com for updates on this and other topics.