US tariffs hit Latin American apparel exporters, end duty-free access

The CAFTA-DR countries—Honduras, Nicaragua, Guatemala, El Salvador, the Dominican Republic, and Costa Rica—previously enjoyed a zero per cent tariff rate on apparel exports to the US under the Free Trade Agreement. However, under the newly introduced US Reciprocal Tariff to rectify trade practices, these countries now face a 10 per cent tariff, except for Nicaragua, which attracts 19 per cent, effectively ending their duty-free access and altering the cost dynamics of trade.

Table 3: Top Latin American countries exporting apparel to the US, their new tariff rates and % change in tariff

Source: TexPro

Mexico remains the only exception, as it continues to enjoy tariff-free access under the United States-Mexico-Canada (USMCA) agreement.

Haiti, which did not benefit from full duty-free access like others, already faced tariffs averaging 12.36 per cent on apparel exports. With the implementation of an additional 10 per cent under the new US tariff policy, Haiti’s effective average tariff rate has surged to 22.36 per cent—a dramatic 181 per cent increase. This sharp rise could severely impact Haiti’s export competitiveness and further strain its fragile garment sector.

Source: TexPro

Fibre2Fashion News Desk (NS)