USTR imposes a phased Section 301 tariff reaching 15% on all Nicaraguan imports that do not qualify as CAFTA–DR originating, effective 2026–2028.

The notice from the Office of the U.S. Trade Representative announces a final Section 301 action targeting Nicaragua due to its acts, policies, and practices related to labor rights, human rights, fundamental freedoms, and the rule of law. USTR determined these practices are unreasonable and burden or restrict U.S. commerce, making them actionable under Sections 301(b) and 304(a) of the Trade Act of 1974.

As the chosen remedy, USTR will impose an additional tariff on all imported Nicaraguan goods that do not qualify as originating under the Dominican Republic–Central America–United States Free Trade Agreement (CAFTA–DR). This is a broad, origin-based measure: it applies to all products of Nicaragua, regardless of sector, unless they meet CAFTA–DR origin rules. No specific HTS subheadings are enumerated in this notice; instead, coverage is defined by country of origin and CAFTA–DR originating status.

The tariff is explicitly phased in over two years, with three key dates:

• January 1, 2026: The new Section 301 tariff is established at a rate of 0%. This is effectively the start date of the measure and the baseline for the phase-in.
• January 1, 2027: The Section 301 rate on all covered Nicaraguan goods increases to 10%.
• January 1, 2028: The Section 301 rate further increases to 15%.

These percentages are additional duties applied on top of the normal MFN/column 1 duty rates and any other applicable duties, but only for Nicaraguan-origin goods that do not qualify as CAFTA–DR originating. Goods that do qualify as originating under CAFTA–DR are excluded from this action and continue to receive CAFTA–DR treatment.

The notice states that, pursuant to Section 305(a) of the Trade Act, USTR will issue a subsequent implementation notice. That later notice is expected to provide the operational details needed for customs compliance, such as the specific HTSUS Chapter 99 provisions, instructions for CBP, and any procedural guidance or potential exclusions.

Immediate compliance implications for importers and brokers are as follows:

• Origin analysis: Identify all products in your import portfolio that are of Nicaraguan origin. This includes direct imports from Nicaragua and goods shipped via third countries but produced in Nicaragua.
• CAFTA–DR qualification: For Nicaraguan-origin goods, determine whether they qualify as originating under CAFTA–DR. This requires a full origin analysis under CAFTA–DR rules of origin and maintenance of supporting documentation (e.g., certifications, bills of materials, production records).
• System and broker readiness: Update internal systems and broker instructions to flag Nicaraguan-origin, non‑CAFTA–DR goods for application of a Section 301 duty line once the implementation notice specifies the relevant HTS/Chapter 99 codes. Ensure that, by January 1, 2026, your systems can distinguish CAFTA–DR-originating from non‑originating Nicaraguan goods.
• Financial and sourcing planning: Model the cost impact of a 10% additional duty effective January 1, 2027 and 15% effective January 1, 2028 on affected Nicaraguan goods. Consider alternative sourcing, shifting production to other CAFTA–DR countries, or restructuring supply chains to preserve CAFTA–DR originating status where feasible.
• Monitoring: Closely monitor USTR and CBP communications for the forthcoming implementation notice and any subsequent modifications, exclusions, or additional actions.

Because the measure is broad and origin-based, it potentially affects all sectors importing from Nicaragua (e.g., textiles and apparel, cigars, coffee, furniture, medical devices, beef, cacao, cassava flour, horticulture, rice, seafood, etc.) unless those products qualify as CAFTA–DR originating. The phased schedule provides a lead time for companies to adjust operations, but trade compliance teams should begin origin reviews and system updates well before the 2027 and 2028 rate increases.

Given the clear, dated duty changes on U.S. imports, this notice requires proactive planning and coordination among trade compliance, procurement, finance, and customs brokers to ensure correct duty assessment and to mitigate cost impacts.