AAFA Responds to Result of Section 301 Investigation on Nicaragua

December 11, 2025 | WASHINGTON, D.C.

The American Apparel & Footwear Association (AAFA) today issued a response to the Office of the U.S. Trade Representative’s (USTR) announcement that additional Section 301 tariffs on certain Nicaraguan goods will be phased in beginning January 1, 2026.

According to the USTR's announced plan, the tariffs will be phased in over two years: a zero percent rate in 2026, increasing to a 10 percent rate on January 1, 2027, then rising to 15 percent rate at the start of 2028. These increases will be stacked on top of the existing 18 percent Reciprocal Tariff Rate enacted by President Trump earlier this year as well as any applicable MFN tariffs. The tariff will be applied to all U.S. imports from Nicaragua not originating under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), which will still face the 18 percent Reciprocal Tariff Rate.

"We support the USTR’s decision in choosing not to impose additional tariffs on CAFTA-DR qualifying goods as part of the section 301 investigation. This approach allows the U.S. to hold trading partners accountable to address unfair practices that harm U.S. workers and businesses, while still safeguarding free trade agreements that are essential to our economy. CAFTA- DR directly supports tens of thousands of American jobs in our industry, with Nicaragua playing a major role in the production of textiles and apparel,” said AAFA President and CEO Steve Lamar.

This announcement follows AAFA’s submission of a November joint industry letter offering industry perspective on potential actions under this investigation, as well as a separate letter welcoming progress on U.S. trade agreements with key Central American partners. 

For regular updates on key trade and customs dates and deadlines, visit AAFA’s Fashion Tariffs 101 page.