As of Sunday, April 20, 2025, here's the latest update on tariffs concerning Nicaragua and its trade relationship with the United States: US Tariffs on Nicaragua: General Tariff: The United States has imposed a general 10% tariff on imports from most countries, including those in Central America. This baseline tariff took effect on April 5, 2025.   Specific Tariff on Nicaragua: Nicaragua faces an additional 8% tariff, bringing the total tariff rate on Nicaraguan products to 18%. This specific, higher tariff for Nicaragua went into effect on April 9, 2025. Rationale: The higher tariff on Nicaragua, compared to the 10% applied to most other Central American nations, was calculated based on the 2024 trade deficit between the U.S. and Nicaragua. According to U.S. figures, the U.S. had a goods trade deficit of $1.7 billion with Nicaragua in 2024 (exports of $2.9 billion vs. imports of $4.6 billion). The formula used involved halving the trade deficit as a percentage of imports.   Pause for Most Countries, Not Nicaragua: While the U.S. announced a 90-day pause on the country-specific reciprocal tariffs for most nations starting April 9, 2025, this pause does not apply to Nicaragua. Therefore, the 18% tariff on Nicaraguan goods remains in effect. Products Affected: This tariff applies broadly to Nicaraguan products, with the apparel sector, which previously enjoyed zero tariffs under CAFTA-DR on its significant exports to the U.S., expected to be particularly affected. Certain products like coffee and gold, with more diverse markets, may experience a lesser impact. Cigars from Nicaragua, which make up a large share of U.S. imports, are also subject to this 18% tariff, potentially leading to price increases for consumers. Nicaragua and US Trade Agreements: CAFTA-DR (Dominican Republic-Central America Free Trade Agreement): Nicaragua is a signatory to CAFTA-DR, a free trade agreement between the United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. This agreement has historically provided tariff advantages for Nicaraguan exports to the U.S.   Potential Removal from CAFTA-DR: There have been discussions and indications from the US, particularly from Trump administration officials, about potentially removing Nicaragua from CAFTA-DR due to concerns over human rights and governance. While no official withdrawal has occurred yet, this possibility remains a point of concern for Nicaragua's trade relationship with the US. Removing Nicaragua from CAFTA-DR would likely lead to significantly higher tariffs on a broader range of its exports to the United States.   Nicaraguan Response: The Nicaraguan government's likely response involves efforts to diversify its trade partners and closely monitor the impact of the tariffs on various sectors of its economy. They may also contest the tariff by highlighting discrepancies between U.S. trade figures and their own Central Bank data, which shows a smaller trade deficit with the U.S. in 2024.   In summary, Nicaragua is currently facing an 18% tariff on its exports to the United States, a higher rate than the general 10% tariff applied to most other countries and its Central American neighbors. This specific tariff is based on the calculated trade deficit. While Nicaragua is part of the CAFTA-DR free trade agreement, there are ongoing discussions about its potential removal, which could further impact trade relations.