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The Office of the U.S. Trade Representative (USTR) has formally moved to impose new Section 301 duties on imports from Nicaragua in response to the country's ongoing human rights violations and erosion of democratic institutions. Products qualifying for preferential treatment under CAFTA-DR will remain exempt. USTR stated that the decision follows review of more than 2,000 public comments and consultations with interagency experts and advisory committees.
Under the announced schedule, the Section 301 duty rate will be set at 0% beginning January 1, 2026, increase to 10% on January 1, 2027, and rise to 15% percent on January 1, 2028. These duties will apply in addition to existing tariff measures, including the 18% Reciprocal Tariff.
USTR also indicated that the timeline and rates may be adjusted if Nicaragua fails to demonstrate measurable progress on the underlying human rights and governance concerns. Notably, these rates are substantially lower than expected—the investigation report USTR published on October 20 recommended tariffs of up to 100%.
USTR emphasized that the action is intended to balance accountability with minimizing business disruption and noted that a follow-on notice will be issued pursuant to Section 305(a) of the Trade Act to implement the measures.
Firms should expect additional guidance from USTR and Customs and Border Protection as implementation proceeds.
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