AA
Share
The Office of the US Trade Representative (USTR) has proposed a series of measures, including the full or partial suspension of Nicaragua’s benefits under the DR-CAFTA Free Trade Agreement and the imposition of tariffs of up to 100% on its exports.
The measures are a response to “the laws, policies, and practices” of the Ortega-Murillo regime in Nicaragua, “related to abuses of labor rights, human rights, and fundamental freedoms, and the dismantling of the rule of law.” According to the United States, these acts are “unreasonable” and constitute a “burden on or restriction of US 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 has decided to open a consultation period on the proposed actions before November 19, 2025. The approved measures are expected to take effect in January 2026.
The Proposed Scenarios
The Office of the Trade Representative outlines two possible scenarios for Nicaragua, which would either fully or partially penalize its trade with the United States:
- Suspend Nicaragua from all benefits of the Dominican Republic–Central America–United States Free Trade Agreement (CAFTA-DR), including tariff concessions and the accumulation of Nicaraguan content for other CAFTA-DR partners, either immediately or gradually over a period of up to 12 months.
- Suspend Nicaragua from some benefits of CAFTA-DR, including tariff concessions and Nicaraguan content accumulation for other partners, either immediately or gradually over up to 12 months.
- Impose tariffs of up to 100% on all Nicaraguan exports to the United States, either immediately or gradually over a period of up to 12 months.
- Impose tariffs of up to 100% on certain Nicaraguan exports immediately, with tariffs on selected sectors to be implemented gradually over up to 12 months.
An Investigation That Began in 2024
The US Trade Representative’s determination concludes an investigation that began on December 10, 2024, during former President Joe Biden’s administration.
That process collected more than 160 public comments and testimonies from experts, organizations, and citizens, along with evidence of “serious human rights violations.” A public hearing was also held on January 16, 2025, during which witnesses gave testimony and answered questions.
A Scenario Foreseen at the Beginning of 2025
In January 2025, the US Special Envoy for Latin America, Mauricio Claver-Carone, stated that the United States “has no interest in having Nicaragua as a trade partner,” and was exploring “options” with regional allies to expel the country from the Dominican Republic–Central America–United States Free Trade Agreement (DR-CAFTA), in force since 2004.
“It’s absurd,” Claver-Carone said, explaining that his country’s strategy was to work with US allies on how to remove Nicaragua from the treaty without affecting other countries. Echoing the rhetoric of US President Donald Trump, the special envoy said that “this treaty was very poorly negotiated and enacted.”
In February 2025, US Secretary of State Marco Rubio called Cuba, Nicaragua, and Venezuela “enemies of humanity,” accusing them of causing the hemisphere’s migration crisis.
“The three regimes that exist in—Nicaragua, Venezuela, and Cuba—are enemies of humanity and have created a migration crisis. If it weren’t for those three regimes, there would be no migration crisis in the hemisphere,” Rubio said at a press conference in San Jose, Costa Rica accompanied by Costa Rican President Rodrigo Chaves.
