USTR imposes phased Section 301 tariffs on all non‑CAFTA‑origin Nicaraguan imports: 0% in 2026, 10% in 2027, 15% in 2028.

This Federal Register notice from the Office of the U.S. Trade Representative (USTR) is an immediately actionable trade measure under Section 301 of the Trade Act of 1974 targeting Nicaragua. USTR has concluded an investigation into Nicaragua’s acts, policies, and practices related to labor rights, human rights and fundamental freedoms, and the rule of law, and determined that these practices are unreasonable and burden or restrict U.S. commerce. As a remedy, USTR is imposing a new additional tariff on imports from Nicaragua.

Scope and coverage

The action applies to all imported goods of Nicaragua that do not qualify as originating under the Dominican Republic–Central America–United States Free Trade Agreement (CAFTA–DR). The notice does not enumerate specific HTS subheadings; instead, it is country- and origin-based. In practice, any HTS line imported into the United States where the country of origin is Nicaragua and the good does not meet CAFTA–DR rules of origin (or is not entered under CAFTA–DR preference) will be subject to this new Section 301 duty once implemented.

Tariff structure and numerical impact

The measure is a phased-in Section 301 tariff:

• January 1, 2026: The new Section 301 rate is set at 0% for all covered Nicaraguan goods. This date effectively establishes the framework and origin-based scope but does not yet increase the duty burden.
• January 1, 2027: The Section 301 duty on all covered Nicaraguan goods increases to 10%. This 10% is an additional duty, applied on top of any existing MFN or other applicable rates for the specific HTS classification.
• January 1, 2028: The Section 301 duty on all covered Nicaraguan goods increases further to 15%, again as an additional duty on top of the underlying tariff rate.

The notice states that these tariff increases in 2026, 2027, and 2028 apply to products entered for consumption, or withdrawn from warehouse for consumption, on or after January 1 of the corresponding year. Thus, the key compliance trigger is the entry or warehouse withdrawal date, not the shipment date.

Relationship to CAFTA–DR

USTR explicitly limits the action to goods that are not originating under CAFTA–DR. Goods that qualify as CAFTA–DR originating and are properly claimed as such are excluded from this Section 301 duty. This creates a strong incentive to:

• Confirm and document CAFTA–DR originating status where possible; and
• Reassess supply chains to shift qualifying production to CAFTA–DR-originating structures or to other CAFTA–DR countries if feasible.

Implementation and future notice

While this notice sets the policy determination and the phased rate schedule, USTR notes that, pursuant to Section 305(a) of the Trade Act, it will issue a subsequent notice to implement the action. That later notice is expected to provide operational details, including how CBP will administer the additional duties (e.g., any special Chapter 99 provisions or instructions for entry filing). Nonetheless, the rate path and effective dates are now fixed for planning purposes.

Compliance impacts and required actions

For importers, brokers, and trade compliance teams, this is an immediately relevant development:

• Origin analysis: Identify all products currently or potentially sourced from Nicaragua and determine whether they qualify as originating under CAFTA–DR. This requires a detailed rules-of-origin review and supporting documentation (e.g., supplier declarations, bills of materials, production records).
• System configuration: Prepare to configure ERP and broker systems to apply a new Section 301 duty line to Nicaraguan-origin, non‑CAFTA‑origin goods. Although the rate is 0% in 2026, systems should be ready to automatically apply 10% as of January 1, 2027, and 15% as of January 1, 2028.
• Contracting and pricing: Review contracts with Nicaraguan suppliers and U.S. customers to address who bears the cost of the additional duties. Adjust pricing models to reflect the 10% and 15% duty increases in 2027 and 2028.
• Sourcing strategy: Evaluate whether to shift production or sourcing from Nicaragua to other CAFTA–DR countries or to restructure operations so that goods qualify as CAFTA–DR originating, thereby avoiding the new Section 301 duty.
• Documentation and audit readiness: Maintain robust documentation to substantiate CAFTA–DR claims. Misclassification of origin or improper preference claims could lead to underpayment of Section 301 duties and potential penalties.

Key dates and priority

The framework becomes applicable on January 1, 2026, with the duty rate at 0%, but the first financial impact occurs on January 1, 2027, when the additional 10% duty takes effect, followed by 15% on January 1, 2028. Because the measure is broad (all non‑CAFTA‑origin Nicaraguan goods) and the rate increases are significant, this action should be treated as high priority for any importer with Nicaraguan exposure. Monitoring for the forthcoming implementation notice and CBP guidance is essential to ensure correct coding and duty assessment at the time of entry.