As of July 10, 2025, the landscape of US tariffs is in flux, with a significant deadline approaching on August 1, 2025.

Tariff Status for El Salvador:

• Reciprocal Tariffs: President Trump has extended the suspension of country-specific reciprocal tariff rates until August 1, 2025. This means that El Salvador, like many other countries, has benefited from a temporary pause on higher reciprocal tariffs. However, letters have been sent to 14 countries, indicating that revised tariff rates will apply as of August 1st if no deal is agreed upon. While specific figures for El Salvador in these latest announcements are not immediately clear in the new "country-specific rates," it is generally understood that countries not explicitly singled out for higher tariffs (like those aligning with "Anti-American BRICS policies" or those with large trade deficits targeted by the "Liberation Day" tariffs) will likely revert to a 10% baseline reciprocal tariff or potentially face adjusted country-specific rates.

• CAFTA-DR: El Salvador remains a party to the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which entered into force in 2006. This agreement largely facilitates trade between the US and El Salvador with zero percent duties on most consumer and industrial goods. The current tariff adjustments are being implemented under the International Emergency Economic Powers Act (IEEPA) and are separate from CAFTA-DR.

• Other Import Restrictions: Notably, the US Customs and Border Protection (CBP) has extended import restrictions on certain archaeological and ecclesiastical ethnological material from El Salvador through March 2, 2030, based on an exchange of diplomatic notes.

Status of Deals and Agreements:

• Customs Mutual Assistance Agreement (CMAA): El Salvador and the United States ratified a CMAA in late 2024 (effective Feb 2025). This agreement aims to strengthen border security and facilitate trade by fostering collaboration in combatting transnational crimes and enhancing efficiency and transparency in customs administration. This agreement is seen as a positive step for trade efficiency and security between the two nations.

• Ongoing Negotiations: The extension of the reciprocal tariff pause until August 1st is explicitly to allow for more time for negotiations and adjustments in trade policies. The US is urging nations to negotiate trade deals to potentially avoid or reduce the impact of these new tariffs.

• "Liberation Day" Tariffs Context: The broader "Liberation Day" tariffs, announced in April 2025, imposed a baseline 10% tariff on imports from all countries not subject to other sanctions, with additional country-specific "reciprocal" tariffs ranging between 11% and 50% for countries with significant trade deficits. While a court ruling on May 28, 2025, temporarily deemed the IEEPA tariffs unlawful, this was paused by the Court of Appeals on May 29, 2025, allowing the tariffs to remain in effect while the appeal is considered.

Companies Affected:

• Companies leveraging CAFTA-DR: US companies exporting to El Salvador and Salvadoran companies exporting to the US under CAFTA-DR will still benefit from the zero-duty provisions for covered goods. However, products not covered by CAFTA-DR, or those subject to the new reciprocal tariffs, would see increased costs.

• Textiles and Apparel: El Salvador is a significant exporter of textiles and apparel to the US. While some Asian countries have seen tariffs up to 49% in this sector, El Salvador has been seen as a potential beneficiary, with some tariffs increasing up to 10% on certain Salvadoran goods. This could lead to US importers seeking new suppliers in El Salvador to avoid higher tariffs elsewhere. Companies like Hanesbrands and Fruit of the Loom have a presence in El Salvador and would be directly impacted by changes to these trade dynamics.

• Other Key Exports to US: Other primary Salvadoran exports to the US include cane sugar, coffee, and food preparations. Companies involved in these sectors could see price adjustments due to any new tariffs. For example, the broader application of tariffs to coffee imports from various origins has already led to price increases and sourcing adjustments for companies in the coffee trade.

• US Subsidiaries in El Salvador: Over 225 US subsidiaries from 105 US parent companies operate in El Salvador, including major players like AES Corp, Citibank, Chevron, Delta, Equifax, FedEx, Google, Kimberly-Clark, Microsoft, PriceSmart, SBA Communications, United, and Walmart. While many of these are service-oriented or have local operations, any new tariffs impacting the flow of goods or general economic stability could indirectly affect their operations.

In summary, while CAFTA-DR continues to provide a framework for duty-free trade for many goods, the upcoming August 1, 2025 deadline introduces uncertainty regarding reciprocal tariffs for El Salvador. The US administration's focus on addressing trade deficits and perceived "non-reciprocal" trade practices means companies engaged in trade between the two countries should be prepared for potential changes in import costs.