A legal and strategic analysis of the new tariffs imposed by the Trump administration on Central American exports
The recent announcement by former U.S. President Donald Trump—now a prominent figure in the political landscape—regarding the imposition of tariffs on Central American exports to the United States marks a turning point for business operations across the region. This measure, which directly impacts countries such as El Salvador, Guatemala, Honduras, Costa Rica, Panama, Belize, and especially Nicaragua, demands immediate legal, tax, and contractual adjustments that businesses cannot afford to overlook.
At Central Law, we have analyzed the key legal and strategic implications of this development and identified the steps your company should begin taking now to mitigate its impact.
What exactly is happening?
As of April 2025, the U.S. has imposed a general 10% tariff on imports from Central America, and a specific 18% tariff on Nicaraguan products. These decisions are part of a broader, more aggressive trade policy framed around “strengthening domestic production” and “reducing foreign dependence.”
Although unilateral in nature, these measures have broad regional and multisectoral repercussions, affecting everything from manufacturing and agriculture to free zones, technology, and logistics.
Legal Implications for Central American Businesses
1. Review of International Contracts
Companies exporting to the U.S. must revise their incoterms, price adjustment clauses, tax fluctuation terms, and force majeure provisions to determine how these new costs will be addressed within their commercial agreements.
2. Impact on Free Trade Zones
Many export operations fall under special economic regimes. Free zones may face diminished competitiveness unless tax incentives are restructured and logistics and distribution models are renegotiated.
3. Tax and Compliance Considerations
The new tariffs must be factored into transfer pricing models, profit margins, and international tax structures. Regional tax planning may require immediate recalibration.
4. Protection Against Unilateral Measures
This situation underscores the importance of international economic law and trade defense mechanisms, especially for companies that may invoke bilateral investment treaties or international agreements.
What Should Companies Be Doing Now?
- Conduct a tariff exposure assessment: identify affected products, supply chains, and contractual frameworks.
- Begin a market diversification and legal resilience strategy, exploring new opportunities in Latin America, Europe, or Asia.
- Reassess contractual relationships with U.S. partners to renegotiate terms and share or mitigate new cost burdens.
- Secure comprehensive legal support, covering customs, international taxation, trade law, and corporate structuring.
A Business-Minded Approach Beyond Legal Compliance
This is more than a tax issue—it’s a wake-up call about the critical importance of strategic legal planning. At Central Law, we understand this because our partners are not only lawyers—they are entrepreneurs. We know what it means to safeguard margins, negotiate with international clients, and protect a business model under volatile conditions.
What Comes Next?
This moment demands agile responses. If your company exports to the U.S., operates within a regional supply chain, or relies on international agreements, now is the time to reassess your legal structure and prepare for what’s ahead.
At Central Law, we are ready to help you evaluate your exposure, redesign your commercial strategy, and navigate this increasingly complex legal landscape.
For more information or inquiries, please contact us at info@central-law.com
