US apparel sector backs Nicaragua tariffs on supply chain risks

Core Viewpoint - The U.S. Trade Representative (USTR) plans to implement phased tariff increases on Nicaraguan imports starting in 2027 due to concerns over labor rights, human rights, and rule-of-law issues [1] Group 1: Tariff Details - An additional tariff will be applied to all Nicaraguan goods not qualifying under the CAFTA-DR, starting at 0% from January 1, 2026, increasing to 10% in 2027, and 15% in 2028 [2] - These new tariffs will be in addition to existing duties, including most-favored-nation tariffs and an 18% "reciprocal" tariff imposed earlier [2] Group 2: Industry Reactions - The American Apparel & Footwear Association (AAFA) welcomed the decision to exclude CAFTA-DR qualifying goods from additional tariffs, emphasizing the importance of maintaining regional supply chains [3][4] - AAFA's president noted that the decision allows the U.S. to hold trading partners accountable while protecting essential free trade agreements that support American jobs [5] - The organization highlighted the risks of broad trade actions on apparel and textile supply chains, stressing that CAFTA-DR rules have created complex supply chains involving U.S. cotton farmers and manufacturers across Central America [6]