Notice2025-22690
Notice of Action: Nicaragua's Acts, Policies, and Practices Related to Labor Rights, Human Rights and Fundamental Freedoms, and the Rule of Law
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Published
December 12, 2025
Issuing agencies
Trade Representative, Office of United States
Abstract
The United States Trade Representative (U.S. Trade Representative) has determined that appropriate action in this investigation includes the imposition of a tariff that is phased-in over two years on all imported Nicaraguan goods not originating under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR).
Full Text
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<title>Federal Register, Volume 90 Issue 237 (Friday, December 12, 2025)</title>
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[Federal Register Volume 90, Number 237 (Friday, December 12, 2025)]
[Notices]
[Pages 57807-57809]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22690]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Notice of Action: Nicaragua's Acts, Policies, and Practices
Related to Labor Rights, Human Rights and Fundamental Freedoms, and the
Rule of Law
AGENCY: Office of the United States Trade Representative.
ACTION: Notice of action.
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SUMMARY: The United States Trade Representative (U.S. Trade
Representative) has determined that appropriate action in this
investigation includes the imposition of a tariff that is phased-in
over two years on all imported Nicaraguan goods not originating under
the Dominican Republic-Central America-United States Free Trade
Agreement (CAFTA-DR).
DATES: Tariff increases in 2026, 2027, and 2028 are applicable with
respect to products that are entered for consumption, or withdrawn from
warehouse for consumption, on or after January 1 of the corresponding
year.
FOR FURTHER INFORMATION CONTACT: Philip Butler, Chair of the Section
301 Committee, Leigh Bacon, Chief Counsel for Negotiations,
Legislation, and Administrative Law, or Nathaniel Halvorson, Deputy
Assistant U.S. Trade Representative for Monitoring & Enforcement, at
(202) 395-5725.
SUPPLEMENTARY INFORMATION:
I. Proceedings in the Investigation
On December 10, 2024, the U.S. Trade Representative initiated an
investigation regarding Nicaragua's acts, policies, and practices
related to labor rights, human rights, and the rule of law pursuant to
302(b)(1) of the Trade Act of 1974, as amended (Trade Act) (19 U.S.C.
2412(b)(1)). See 89 FR 101088 (December 13, 2024). The notice of
initiation solicited written comments on, inter alia: Nicaragua's acts,
policies, and practices related to labor rights, human rights, and the
rule of law; whether Nicaragua's acts, policies, and practices related
to labor rights, human rights, and the rule of law are unreasonable or
discriminatory; whether Nicaragua's acts, policies, and practices
burden or restrict U.S. commerce, and if so, the nature and level of
the burden or restriction; and what action, if any, should be taken.
Interested persons filed over 160 written comments. In addition,
USTR and the Section 301 Committee convened a public hearing on January
16, 2025, during which witnesses provided testimony and responded to
questions. The public submissions are available at: <a href="https://comments.ustr.gov/s/">https://comments.ustr.gov/s/</a> in docket number USTR-2024-0021, and a transcript
of the hearing is available on USTR's website.
On December 10, 2024, the U.S. Trade Representative requested
consultations with the Government of Nicaragua pursuant to Section
303(a) of the Trade Act (19 U.S.C. 2413(a)). The Government of
Nicaragua declined to hold consultations regarding the investigation
under the statutory framework.
Based on information obtained during the investigation, and in
consultation with the Section 301 Committee, USTR prepared a public
Report on the investigation. Published on October 20, 2025, the
``Report on Nicaragua's Acts, Policies, and Practices Related to Labor
Rights, Human Rights and Fundamental Freedoms, and the Rule of Law'' is
available on USTR's website.
As detailed in the Report, Nicaragua has engaged in increasingly
pervasive abuses of labor rights, as well as human rights and
fundamental freedoms, and has systematically dismantled rule of law
protections against arbitrary government action. First, the Ortega-
Murillo regime has committed or allowed a number of abuses of
internationally recognized labor rights. These include 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. Second, the Ortega-Murillo regime engages in abuses
of human rights and fundamental freedoms, including against U.S.
persons and property, such as the repression of religious organizations
through the forced closure and seizures
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of institutions and properties. Third, the Ortega-Murillo regime has
engaged in the dismantling of the rule of law in Nicaragua. This
includes 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.
Considering information obtained during the investigation, as
reflected in the Report, and taking account of public comments and the
advice of the Section 301 Committee and advisory committees, the U.S.
Trade Representative determined that the acts, policies, and practices
covered in the investigation are unreasonable and burden or restrict
U.S. commerce, and are thus actionable under sections 301(b) and 304(a)
of the Trade Act (19 U.S.C. 2411(b) and 2414(a)). See 90 FR 48511
(October 23, 2025) (October 23 notice).
In particular, the U.S. Trade Representative determined that the
acts, policies, and practices of Nicaragua related to abuses of labor
rights, human rights and fundamental freedoms, and dismantling the rule
of law are unreasonable within the meaning of the Section 301 statute
for several reasons.
First, Nicaragua's acts, policies, and practices are fundamentally
unfair, incompatible with, and run counter to norms against abuses of
labor rights, human rights and fundamental freedoms, and the rule of
law. Second, these acts, policies, and practices are also contrary to
the norms, rules, and rights reflected in Nicaragua's own laws and
constitution. Third, they are unreasonable in light of regional and
international labor and human rights conventions, instruments,
agreements, or treaties to which Nicaragua itself is party and that
establish norms against the kind of acts, policies, and practices
undertaken by Nicaragua's government.
The U.S. Trade Representative determined that Nicaragua's acts,
policies, and practices related to labor rights, human rights and
fundamental freedoms, and the rule of law burden or restrict U.S.
commerce by creating unfair competition against U.S. workers and
businesses through denial of basic labor rights resulting in
artificially low-cost Nicaraguan products; creating disincentives or
lost sales and exports for U.S. enterprises seeking to access or
operate in Nicaragua by weakening its economy through diminishing
worker participation and productivity; and causing lost investment and
commercial opportunities for U.S. workers and companies through the
creation of a high-risk environment in which to invest or conduct
business.
In the October 23 notice, the U.S. Trade Representative proposed a
range of actions including the suspension, withdrawal, or prevention of
application of benefits of the Dominican Republic-Central America-
United States Free Trade Agreement (CAFTA-DR) benefits to Nicaragua,
and additional duties of up to 100 percent on some or all products of
Nicaragua. See 90 FR 48511.
USTR requested public comments regarding the proposed actions,
including tariff concessions and cumulation of Nicaraguan content for
other CAFTA-DR partners, and the effective date of such suspension; and
the level of increase and the effective date of any increase for
specific sectors with respect to application of increased tariffs on
Nicaraguan imports. In commenting on the timing of increased duties for
specific sectors, USTR requested that the commenters specifically
address whether imposing increased duties on particular sectors or
suspending or withdrawing concessions on a particular sector, would be
practicable or effective to obtain the elimination of Nicaragua's acts,
policies, and practices or would cause disproportionate economic harm
to U.S. interests, including small- or medium-size businesses and
consumers.
In response to the October 23 notice, USTR received 2,006 written
comments. Commenters included representatives from numerous
manufacturing and agricultural sectors as well as a submission from the
Nicaraguan government.
II. Determination of Action
On October 20, 2025, USTR announced the U.S. Trade Representative's
determination that Nicaragua's acts, policies, and practices under
investigation are unreasonable and burden or restrict U.S. commerce,
and are thus actionable under section 301(b) of the Trade Act. Section
301(b) provides that upon determining that the acts, policies, and
practices under investigation are actionable and that action is
appropriate, the U.S. Trade Representative shall take all appropriate
and feasible action authorized under section 301(c), subject to the
specific direction, if any, of the President regarding such action, and
all other appropriate and feasible action within the power of the
President that the President may direct the U.S. Trade Representative
to take under section 301(b), to obtain the elimination of that act,
policy, or practice. Section 301(c) of the Trade Act authorizes the
U.S. Trade Representative to take certain actions for purposes of
carrying out the provisions of Section 301(b). For example, Section
301(c)(1)(A) authorizes the U.S. Trade Representative to ``suspend,
withdraw, or prevent the application of, benefits of trade agreement
concessions to carry out a trade agreement with the foreign country
referred to in such subsection.'' Section 301(c)(1)(B) also authorizes
the U.S. Trade Representative to ``impose duties or other import
restrictions'' on the goods of the foreign country subject to the
investigation.
USTR and the Section 301 Committee have carefully reviewed the
public comments regarding the proposed actions. USTR also has
considered the advice of advisory committees and consulted with the
relevant agencies. Considering the comments and advice, and pursuant to
sections 301(b), 301(c), and 304(a) of the Trade Act (19 U.S.C.
2411(b), 2411(c), and 2414(a)), the U.S. Trade Representative has
determined that action is appropriate, and that appropriate and
feasible action in this investigation includes the imposition of a
tariff that is phased-in over two years on all imported Nicaraguan
goods that are not originating under CAFTA-DR. The tariff will be set
at zero percent on January 1, 2026 and will increase to 10 percent on
January 1, 2027, and to 15 percent on January 1, 2028. Pursuant to
Section 305(a) of the Trade Act (19 U.S.C. 2415(a)(1)), USTR will issue
a subsequent notice to implement this action.
III. Responses to Significant Comments Regarding the Proposed Actions
As noted, in response to the October 23 notice, USTR received 2,006
written comments. Roughly half of the comments provided support for one
or more of the proposed actions and roughly half provide some form of
opposition to the actions. Of the comments that opposed the proposed
actions, most argued that the actions should be tailored to be phased-
in or exclude certain industries. Industries requested for exclusion
include: textiles and apparel; cigars; coffee; furniture and housing;
medical devices; beef and meat products; cacao; cassava flour,
horticulture (unrooted cuttings); rice; and seafood. Few commenters
express general opposition to the proposed actions. Those who expressed
such opposition generally oppose the broad application of the proposed
actions. They assert, inter alia, that the actions would have a
negative impact on the United States by harming U.S. consumers and
workers, cause disruptions in supply chains, harm Nicaraguan
businesses, including those
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that export to the United States, and result in increased unemployment
in Nicaragua.
Comments generally supporting the proposed actions urge USTR to do
what is necessary to eliminate the acts, policies, and practices.
However, like many of the comments opposing the proposed actions, they
also suggested a calibrated approach. While acknowledging the need to
address the Ortega-Murillo regime's actions, these comments requested
that the action be tailored to maximize leverage, while avoiding damage
to their specific interests (producing in, importing from, or exporting
to Nicaragua) or the livelihoods of Nicaragua's workers.
Considering the public comments and the advice of the Section 301
Committee, the U.S. Trade Representative has determined that
appropriate action in this investigation is the imposition of a 15
percent tariff on all imported Nicaraguan goods that are not
originating under CAFTA-DR that is phased-in over two years.
Accordingly, the tariff will be set at zero percent on January 1, 2026,
increase to 10 percent on January 1, 2027, and 15 percent on January 1,
2028.
The U.S. Trade Representative's determination takes into account
the many comments that expressed concern regarding the possible impact
and disruption to U.S. interests of taking broad action, including the
suspension, withdrawal, or prevention of application of benefits of the
CAFTA-DR and broad-based tariffs. Specifically, limiting the tariffs to
goods that are not originating under CAFTA-DR should limit the impact
on U.S. exports to Nicaragua and U.S. companies producing in Nicaragua,
while providing increasing pressure on Nicaragua to eliminate its acts,
policies, and practices, the two-year phase-in should provide companies
with the time to shift operations to other CAFTA-DR countries.
The U.S. Trade Representative will continue to monitor the effects
of the trade action and the progress made toward resolution of this
matter. Additionally, the U.S. Trade Representative will continue to
examine the efficacy of these actions. If it is determined that
additional leverage is needed to encourage Nicaragua to eliminate the
investigated acts, policies, and practices, the U.S. Trade
Representative will consider taking additional action.
Jennifer Thornton,
General Counsel, Office of the United States Trade Representative.
[FR Doc. 2025-22690 Filed 12-11-25; 8:45 am]
BILLING CODE 3390-F4-P
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</html>Indexed from Federal Register on December 12, 2025.
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