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Implications
The U.S. tariff situation for El Salvador is governed by the pre-existing free trade agreement, though new, broader reciprocal tariffs have introduced an element of uncertainty.
Here is an update on El Salvador's trade relationship with the U.S. as of October 2025:
Area | Status (October 2025) | Key Details & Impact |
Primary Trade Agreement | CAFTA-DR is Active | El Salvador remains a party to the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) (in force since 2006), which provides for zero-duty trade on the majority of consumer and industrial goods. |
New US Reciprocal Tariffs | 10% Baseline Applied | As of mid-2025, El Salvador, like most non-sanctioned countries, is subject to the new 10% baseline reciprocal tariff imposed under the International Emergency Economic Powers Act (IEEPA). This tariff applies to goods not covered by CAFTA-DR or where the new IEEPA tariff supersedes existing duty-free treatment. |
Country-Specific Tariff Rate | Uncertain/Negotiated | Plans for a higher, country-specific "reciprocal tariff" (which range from 11% to 50% for countries with large trade deficits) were subject to ongoing negotiations. The specific long-term, non-CAFTA-DR rate for El Salvador has been unclear but is not among the highest rates threatened for major trading partners like China or Canada. |
Impact on Companies (Key Exports) | Mixed - Trade Diversion | * Apparel and Textiles (El Salvador's top exports to the U.S.) may see modest cost increases due to the 10% baseline tariff on non-CAFTA goods. |
Impact on Companies (Opportunity) | Potential Gain | Salvadoran and U.S. companies operating there (like Hanesbrands and Fruit of the Loom) may see a competitive advantage due to "trade diversion." As tariffs have increased significantly on competitors (e.g., China and Vietnam), U.S. importers may shift supply chains to El Salvador to maintain lower costs through the CAFTA-DR framework. |
Other Trade Developments | Increased Cooperation | A Customs Mutual Assistance Agreement (CMAA) ratified in late 2024 (effective Feb 2025) is aimed at improving border security, efficiency, and transparency in customs administration. |
Key Takeaway:
The long-standing CAFTA-DR agreement provides a crucial buffer for Salvadoran goods, keeping many imports duty-free. However, the new 10% baseline tariff applies more broadly to goods not covered by CAFTA-DR, creating new costs. The primary impact for Salvadoran companies is the potential to gain market share from other, more heavily tariffed countries.
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United States Imports from Countries during 2024, according to the United Nations COMTRADE database on international trade. United States Imports from Countries- data, historical chart and statistics - was last updated on April of 2025.
Investing in USA
theboardiQ Economic Relevance Score, ranks States of USA based on 11 parameters
Sources : Forbes | USDA Economic Research | TCGen Total Innovation Rank Index | Best States for Manufacturing | World Population Review | Tax Foundation | US News | BEA Data | Wikipedia | International Trade Administration
theboardiQ's Economic Relevance Score provides a comprehensive, data-driven assessment of a nation's economic vitality and global significance. This score is meticulously calculated using 11 key parameters, each reflecting a critical facet of economic performance. It analyzes the representation of Fortune 500 companies within a nation, a strong indicator of its business environment and market size. The balance of trade surplus or deficit reveals the nation's international competitiveness and export strength. It incorporates Gross Domestic Product (GDP), a fundamental measure of overall economic output, and examine the health of key sectors like agriculture and manufacturing. The score also accounts for innovation, gauging a nation's ability to drive future growth through technological advancements. Crucial labor market indicators such as employment rates are considered, alongside fiscal policies reflected in tax rates. To capture the lived experience of citizens, it assesses cost of living and disposable income, providing insight into purchasing power and economic well-being. Finally, education levels are integrated, recognizing their pivotal role in fostering a skilled workforce and driving long-term economic development. By synthesizing these 11 parameters, theboardiQ's Economic Relevance Score delivers a nuanced and holistic view of a nation's economic standing, enabling informed strategic decisions. The Top 5 States in the assessment are Texas, North Carolina, Virginia, Florida and Washington. Texas does consistently well across most of the 11 variables especially in the areas of GDP, F500 representation in the State, Balance of Trade where it ranks 2nd nationally. North Carolina scores as the highest-ranking state nationally in manufacturing and performs consistently across the other variables. Virginia does well in disposable income where it ranks 3rd nationally. It also scores high in the variables of manufacturing and employment Florida holds the 4th ranking nationally for GDP and Tax Washington State scores the top spot for disposable income nationally, 2nd for education and 3rd for innovation. Colorado, with an overall rank of 7 scores the top spot for Education (schools and higher education). Nebraska, that ranked 10th overall, did well in Agriculture where it is ranked 3rd nationally as well as Trade Balance where it ranked 5th. Illinois, though ranked 20th overall did well nationally in F500 representation, GDP, Agriculture, and Disposable Income. Pennsylvania comes in at 21 overall doing well nationally in GDP (6th); Manufacturing (8th) and F500 representation (8th) New York scores 23rd overall with a 2 ranking in Disposable Income nationally, as well as 3rd in both F500 representation and GDP. California comes in at 29th overall and has the top spot ranking in a whopping 4 variables nationally – GDP, Innovation, Agriculture and F500 representation. However, performance in the areas of Trade Balance, Cost of Living, Tax, Manufacturing and Employment resulted in the overall ranking dipping. Wyoming at 30th overall scores the top spot nationally in the area of Tax Massachusetts at 31 overall does well in innovation where it is ranked 2nd nationally Arkansas at 36 and Alabama at 39, do well in overall Cost of Living where they are ranked 2nd and 3rd nationally, respectively. Louisiana ranked 44th overall is ranked 1st in Trade Balance nationally.
Economic
Relevance
Ranking
State | Info | Overall Rank | Agri | Innov | Mfg | Employ | Tax | Edu | GDP | F500 Rep | Trade Balance | Cost of Living | Disp Income |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Texas | 1 | 4 | 5 | 11 | 10 | 7 | 42 | 2 | 2 | 2 | 24 | 13 | |
North Carolina | 2 | 9 | 21 | 1 | 4 | 12 | 28 | 11 | 16 | 41 | 17 | 17 | |
Virginia | 3 | 32 | 24 | 6 | 2 | 28 | 7 | 13 | 6 | 34 | 35 | 3 | |
Florida | 4 | 21 | 11 | 15 | 1 | 4 | 35 | 4 | 7 | 40 | 30 | 37 | |
Washington | 5 | 16 | 3 | 36 | 28 | 45 | 9 | 9 | 15 | 9 | 43 | 1 | |
Missouri | 6 | 11 | 25 | 22 | 20 | 13 | 32 | 21 | 22 | 20 | 10 | 20 | |
Georgia | 7 | 15 | 26 | 9 | 3 | 26 | 34 | 8 | 9 | 43 | 26 | 19 | |
Minnesota | 8 | 6 | 10 | 47 | 6 | 44 | 8 | 20 | 10 | 33 | 33 | 9 | |
Ohio | 9 | 12 | 32 | 7 | 30 | 35 | 36 | 7 | 5 | 38 | 15 | 11 | |
Illinois | 10 | 5 | 23 | 31 | 23 | 37 | 16 | 5 | 4 | 47 | 32 | 7 |