Donald Trump slaps new tariffs on Nicaragua: What to know

U.S. President Donald Trump’s administration has announced a series of phased tariffs on Nicaraguan imports. 

The measures target goods not covered by the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). 

Newsweek contacted Maricruz Prieto Sequeira, Nicaragua‘s director general for foreign trade, for comment via email.

Why It Matters

This action comes in response to what U.S. officials describe as Nicaragua’s persistent violations of labor rights, human rights and the rule of law. 

These new trade measures threaten to upend Nicaragua’s export-dependent economy and send a strong signal concerning the priority the Trump administration places on human rights and fair labor practices in its foreign trade policy. 

For American businesses and consumers, the tariffs could also affect the prices and sourcing of key imports—such as apparel, gold and agricultural products from Nicaragua.

What To Know

The Office of the United States Trade Representative (USTR), an executive office of the president, confirmed on Wednesday that new Section 301 tariffs would be phased in over two years, beginning January 1, 2026.

According to USTR’s announcement, the tariffs will begin at zero percent on January 1, 2026, increase to 10 percent on January 1, 2027, and reach 15 percent on January 1, 2028. 

The timeline and rates may be modified if the administration determines that Nicaragua is not making progress on addressing the listed concerns. 

USTR said this approach was designed to balance “the need for action and the importance of limiting disruption for U.S. businesses.”

The agency determined that Nicaragua’s government had engaged in “unreasonable” practices that “burden or restrict U.S. commerce” after reviewing over 2,000 public comments and consulting agency experts and advisers. 

The tariffs apply to all Nicaraguan goods not originating under the CAFTA-DR agreement and are in addition to other existing tariffs, such as the standing 18 percent reciprocal tariff.

A public hearing investigation involving “witness testimony and more than 160 comments and rebuttal comments” found “gross violations of human rights,” USTR said.

The agency said these findings were also referred to the U.S. Department of State for further review and possible advocacy.

What People Are Saying

The Office of the United States Trade Representative said in a statement on Wednesday: “Today’s responsive action follows the Office of the United States Trade Representative’s (USTR’s) determination that Nicaragua’s acts, policies, and practices are unreasonable and burden or restrict U.S. commerce, taking into account over 2,000 public comments and consulting with government agency experts and USTR cleared advisers.”

Manuel Orozco, the director of the Migration, Remittances and Development Program at the Inter-American Dialogue, said ahead of the tariff announcement: “Some businesses will choose to leave the country out of fear of punitive tariffs exceeding 20 percent.”

He added: “The U.S. financial sector might sever ties with Nicaraguan-based companies due to high perceived risk, given the report’s damning characterization of the regime as acting against U.S. commercial interests.

“For the United States, the logical step is to remove Nicaragua from DR-CAFTA. The actions toward Nicaragua are punitive and proportionate to the dictatorship’s conduct; there is no negotiation posture, let alone dialogue. That lies entirely in the regime’s hands. To mitigate the risks of even a minimal decision on Nicaragua, it’s essential to propose a moratorium, but only if accompanied by concrete, positive, and proactive changes in Nicaragua’s stance, including a clear roadmap toward democratic transition.”

What Happens Next

The USTR is set to issue a subsequent notice under Section 305(a) of the Trade Act to implement the determined tariffs. 

Analysts warn that the consequences for Nicaragua could be significant, potentially leading to large-scale job losses and loss of foreign investment. 

For American importers and retailers, these tariffs may also result in higher costs and supply chain disruptions for products typically sourced from Nicaragua, including textiles and agricultural goods. 

As the phased tariffs begin to take effect in 2026, businesses will likely have to adjust sourcing strategies and pricing structures, while policymakers and human rights advocates monitor both economic and humanitarian developments in Nicaragua.