On October 20, the Office of the U.S. Trade Representative (USTR) announced its determination under Section 301 of the Trade Act of 1974 that Nicaragua's acts, policies, and practices related to abuses of labor rights, abuses of human rights and fundamental freedoms, and dismantling of the rule of law are unreasonable and burden or restrict U.S. commerce.

USTR is proposing a range of responsive actions, including withdrawal of preferential treatment under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) or 100% tariffs on imports from Nicaragua.

USTR is inviting written comments on the proposed actions by November 19, 2025.

Findings

On December 10, 2024, USTR initiated an investigation regarding Nicaragua's acts, policies, and practices related to labor rights, human rights, and the rule of law. USTR invited public comments and a public hearing to inform its investigation, which culminated in a report detailing the evidence and findings. The report is available here.

According to the report, USTR has made the following findings:

• The Ortega-Murillo regime has committed or allowed a number of abuses of internationally recognized human rights, including repression of freedom of association and collective bargaining, interference in worker and employer organizations; seizure of assets and removal of citizenship of members of worker and employer organizations; arbitrary dismissals and arrests; child and forced labor; human trafficking; and workplace abuses, including wage deductions and theft, and retaliation for claiming rights violations.
• The Ortega-Murillo regime engages in abuses of human rights and fundamental freedoms, including against U.S. persons and property.
• The Ortega-Murillo regime has engaged in the dismantling of the rule of law in Nicaragua, including imposing arbitrary or incorrect fines, taxes, customs inspections, and rulings; revoking the legal status of prominent business organizations; and seizing property interests without legal recourse.

USTR concluded that these actions by the Ortega-Murillo regime are actionable under Section 301 for the following reasons:

• The acts, policies, and practices are fundamentally unfair and incompatible with norms against abuses of labor rights, human rights and fundamental freedoms, and the rule of law.
• The acts, policies, and practices harm both Nicaraguans directly and U.S. workers and businesses indirectly through exploitation of workers resulting in unfair competition.
• The acts, policies, and practices negatively impact the Nicaraguan economy and market, with lost sales and exports for U.S. enterprises seeking to access or operate in Nicaragua's market.
• The acts, policies, and practices lead to lost investment and commercial opportunities for U.S. workers and companies, including through the creation of a high-risk environment to invest or conduct business.

Proposed Actions

As a result of its determination, USTR is proposing a range of responsive actions. These include:

• Suspending the application of all CAFTA-DR benefits to Nicaragua, including tariff concessions and cumulation of Nicaraguan content for other CAFTA-DR partners, immediately or phased in over a period of time up to 12 months;
• Suspending the application of some CAFTA-DR benefits to Nicaragua, including tariff concessions and cumulation of Nicaraguan content for other CAFTA-DR partners, immediately or phased in over a period of time up to 12 months;
• Applying tariffs of up to 100% on all Nicaraguan imports, immediately or phased in over a period of time up to 12 months;
• Applying tariffs of up to 100% on some Nicaraguan imports immediately, with tariffs for selected sectors phased in over a period of time up to 12 months

USTR invites comments from stakeholders on these proposed actions. Comments must be submitted at https://comments/ustr.gov/s/ using the docket in the portal entitled "Request for Comments Concerning Proposed Action Pursuant to the Section 301 Investigation of Nicaragua's Acts, Policies, and Practices Related to Labor Rights, Human Rights and Fundamental Freedoms, and Rule of Law", docket number USTR-2025–0006.