{"id":171865,"date":"2025-08-05T01:25:00","date_gmt":"2025-08-05T07:25:00","guid":{"rendered":"https:\/\/confidencial.digital\/sin-categoria\/trumps-18-tariffs-to-hit-nicaraguan-textile-and-auto-harness-exports\/"},"modified":"2025-08-05T02:36:12","modified_gmt":"2025-08-05T08:36:12","slug":"trumps-18-tariffs-to-hit-nicaraguan-textile-and-auto-harness-exports","status":"publish","type":"post","link":"https:\/\/confidencial.digital\/en\/economy\/trumps-18-tariffs-to-hit-nicaraguan-textile-and-auto-harness-exports\/","title":{"rendered":"Trump\u2019s 18% Tariffs to Hit Nicaraguan Textile and Auto Harness Exports"},"content":{"rendered":"\n

The 18% tariffs imposed by Donald Trump\u2019s administration on exports from Nicaragua to the United States \u2014 set to take effect on Thursday, August 7, 2025<\/a> \u2014 while tariffs for the rest of the CAFTA countries remain at 10% (with the exception of Costa Rica, which will face 15%), will mainly affect exports of textiles, which amount to $2 billion, and exports of automobile electrical harnesses, around $800 million, according to economist Juan Sebasti\u00e1n Chamorro, former Deputy Minister of Finance.<\/p>\n\n

In an interview on the program Esta Semana<\/em>, broadcast on CONFIDENCIAL\u2019s YouTube channel<\/a> due to television censorship in Nicaragua, Chamorro explained that with the eight-point difference in tariffs, Nicaragua will lose competitiveness compared to other countries like Honduras and the Dominican Republic, which export the same textiles to the United States, or automobile harnesses to Mexican plants that export to the U.S. and are subject to higher taxes.<\/p>\n\n

The former political prisoner, exiled in the United States and a researcher at Tulane University in New Orleans, warned that in addition to the 18% tariffs, Nicaragua could face further taxes if the United States decides to adopt other unilateral trade measures due to violations of the CAFTA agreement or because of its clientelist relationship with China, Russia, Iran, and North Korea. Nicaragua has already been excluded from the regional investment summit promoted by the United States, which will take place in October 2025 in Panama.<\/p>\n\n

On Thursday, March 7, 2025, Donald Trump\u2019s tariff policy will take effect for more than 90 countries around the world, ranging from 10% for many of them, up to 50% for Brazil, 35% for Canada, 30% for China, 25% for Mexico, 15% for the European Union, and 18% for Nicaragua. What impact will this trade war have on the global economy?<\/strong><\/p>\n\n

This is an unprecedented event in global economic history: a commercial and economic superpower imposing tariffs on the entire world. It will revolutionize trade relations. Economists, for well-established reasons, have generally opposed the imposition of tariffs because they involve restrictions or disruptions to trade relations. Therefore, it can be concluded that, overall, this will have a negative impact on the global economy. <\/p>\n\n

In the United States, there is already talk of an inflationary surge once the inventories of imports made before the tariffs run out, which will lead to rising prices. The specific impact on each country will be harder to predict due to the enormous uncertainty surrounding trade policy. That helps explain why President Trump wants to conclude these negotiations quickly, setting deadlines\u2014because the uncertainty is also affecting U.S. markets. <\/p>\n\n

Tariffs are being justified as a way to defend U.S. economic interests, but in some cases, Trump is imposing them as a form of political pressure or retaliation over political disagreements\u2014as with Brazil or Canada, for example, whom he is threatening with additional tariffs for recognizing the Palestinian state.<\/strong><\/p>\n\n

Yes, and part of the justification is that Canada is one of the main exporters of fentanyl to the United States, something that has not been proven. Using trade policy as a political weapon leads to distortions that further harm trade relations. In Canada and Mexico, whose economies have become highly intertwined with the U.S. since NAFTA was signed decades ago, this situation is a nightmare for exporters and importers. Some auto parts cross the borders two, three, or even four times. All of this will lead to a series of structural changes in a world with tariffs and high taxes due to the distortions involved, creating a situation worse than what would exist under free trade. <\/p>\n\n

Will the reciprocal measures that some countries are adopting against the United States have any impact on price levels or domestic consumption in the U.S.?<\/strong><\/p>\n\n

Definitely, and it\u2019s not very clear that this will benefit the countries imposing reciprocal tariffs, because they would also be punishing their own consumers and exporters, who are already being affected. So, these countries would be harming their local consumers as well. Economists worldwide have reiterated that this measure can only lead to reduced economic benefits for societies due to these trade wars. Therefore, we hope this doesn\u2019t continue to escalate, especially the tariff war with China, which has the global market very concerned since these are the two main world powers. <\/p>\n\n

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