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Nicaragua’s opposition media welcome Trump’s new tariffs – and ignore how they were calculated

By John Perry

[John Perry is based in Masaya, Nicaragua, and writes for the Council on Hemispheric Affairs, London Review of Books, FAIR, The Grayzone, Covert Action Magazine and others. This article was originally published in Countercurrents, Dissident Voice and others.]

On April 2, which he called “Liberation Day,” Trump announced tariffs for most of the countries of the world. Nicaragua’s tariff was placed at 18%.  [Photo: White House]

Five countries in Central America, together with the Dominican Republic in the Caribbean, have a free trade agreement with Washington, but this didn’t protect them from the punitive tariffs announced on President Trump’s “Liberation Day.”

A minimum 10 per cent tariff on exports to the US will hit low-income countries throughout the region. But exports from Nicaragua have been saddled with an even higher tariff of 18 per cent. Delighted opponents of Nicaragua’s Sandinista government have blamed it, rather than Trump, for the country receiving this additional penalty. However, simple examination of the figures shows that Nicaragua’s tariff was calculated in the same way as every other country’s.

Before examining the opposition media’s error-strewn reports, this article first explains the background: how the tariff was set, whether it is legitimate and how US-Nicaragua trade is changing. Then it turns to the opposition’s mistakes and explains how they are using Trump’s actions to bolster their attacks on Nicaragua’s government and people.

How the tariffs were set

Trump’s chart of tariffs has two sets of figures for each country: the “tariffs charged to the USA” and the “reciprocal tariffs” to be imposed this month. Bizarrely, the “tariffs charged to the USA” do not relate to actual tariffs charged on US imports. Instead, they are the product of a calculation based on each country’s trade gap with the US. For most countries, the value of these “tariffs charged” has been set at 10 per cent, on the basis that the US has no trade deficit with them, or only a small one. All of these countries (including Nicaragua’s neighbors) are hit with a “reciprocal tariff” of 10 per cent on their exports to the US, from this month onwards, even if they buy more from the US than they sell to it.

However, a higher “tariff charged” is calculated for countries with which the US is judged to have a bigger trade deficit. For each country, the White House looked up the deficit for its trade with the US in goods for 2024, then divided that by the total value of the country’s exports to the US. Trump, to be “kind”, said he would offer a discount, so halved that figure. The calculation was distilled into a formula.

For example, these are the figures for China:

Goods trade deficit (exports from the US minus imports): – $291.9 billion
Total goods imported to the US from China: $438.9 billion
A ÷ B = – 0.67, or 67 per cent
Half of this is 34 per cent, the new tariff being applied to China.

Based on this formula, the small African country of Lesotho was saddled with the highest “reciprocal tariff” of 50 per cent, while several major SE Asian countries were also hit with very high tariffs.

How Nicaragua’s tariff was calculated

Nicaragua’s “reciprocal tariff” was calculated in the same way. According to US trade figures, in 2024 US goods exports to Nicaragua were $2.9 billion, while US goods imports from Nicaragua totaled $4.6 billion. The US goods trade deficit with Nicaragua was therefore – $1.7 billion in 2024.

The calculation was therefore: trade deficit (- $1.7 billion) ÷ imports ($4.6 billion) = – 0.37, or 37 per cent, halved to produce a “reciprocal tariff” of 18 per cent.

This means that from April 9, there will be a new tax of 18 per cent on Nicaraguan goods sent to the US, payable as a customs duty on their arrival by the company or agency importing the goods. [Note: President Trump, on April 9, announced a 90 pause on the tariffs.]

How Nicaragua might contest the tariff

It seems unlikely that Trump will bend to pressure on the tariffs. However, at least in theory, there are three ways in which Nicaragua might argue that the tariff is wrongly imposed:

Nicaragua’s Central Bank shows a smaller trade gap with the US. According to the Central Bank’s figures for 2024, Nicaragua’s exports to the US totaled $3.7 billion, not $4.6 billion, while its imports from the US totaled $2.7 billion, giving a trade gap of $1 billion, not $1.7 billion. On the basis of Trump’s tariff formula, the result should have been a 14 per cent tariff, not 18 per cent, if Nicaragua’s trade figures are correct. (A possible explanation for the difference may be the way that goods, originating in Nicaragua, are processed in other Central American countries before arrival in the US.)

Although most Central American countries import more from the US than they export to it, Costa Rica also has a trade surplus with the US, amounting to $2 billion, bigger than Nicaragua’s, yet it is only being penalized by the standard “reciprocal tariff” (10 per cent).

Most importantly, as the Guatemalan government pointed out, under the CAFTA-DR trade agreement new tariffs are illegal (under both US and international law). The treaty prohibits new tariffs or customs duties between the seven member countries. Therefore, all six of the other countries that are parties to CAFTA-DR are entitled to challenge the US for breaching it.

Action by CAFTA-DR members is complicated by the fact that Nicaragua is not only worst hit by the tariffs but is also a country that the US would like to exclude from the treaty completely, a point picked up below.

Changing significance of Nicaraguan exports to the US

Nicaragua’s Central Bank divides its trade figures between “merchandise” and products from free trade zones (principally, apparel). This, as we will see, confused the opposition media. Here is a breakdown of Nicaragua’s exports:

*Exports of merchandise (e.g. gold, coffee, meat, etc.) totaled $4.2 billion in 2024, with the US accounting for 38.7 per cent of these, or $1.62 billion.
*Exports from free trade zones were lower ($3.5 billion) but the proportion going to the US was much higher (59 per cent, or $2.08 billion).
*Of Nicaragua’s total exports, at $7.7 billion, $3.7 billion went to the US (48 per cent).
*Exports provide 39 per cent of Nicaragua’s annual income or GDP.
*Exports to the US therefore account for a significant 18 per cent of GDP.

These figures exclude services, such as tourism and transport, where trade between Nicaragua and the US is roughly in balance (unlike Guatemala and Honduras, with whom the US has a strong trade surplus in services).

Exports to the US have fallen slowly from over 50 per cent of the total two years ago, as the government looks for other markets. Exports to the People’s Republic of China, for example, were four times higher in 2024 than in 2022, but (at $68 million) are still a small proportion. There are other growing export markets, of which the most notable is Canada (now the second biggest buyer of Nicaraguan merchandise).

The Nicaraguan government’s response to the tariffs is likely to involve continued efforts to diversify trade and keeping a watchful eye on the effects on different sectors of the economy. Producers of products like coffee and gold may be less affected as they already have diverse markets. On the other hand, the apparel sector, which until this month enjoyed zero tariffs on its $2 billion exports to the US, is geared to the US market and might find greater difficulty in mitigating the tariff’s effects.

Celebration and misinformation in opposition media

Nicaragua’s opposition media, long financed by the US government, admit that they have been hit by Elon Musk’s cuts. How they are now funded is unclear. However, prominent opposition activists enjoy salaried employment in US universities and think tanks, where they call for sanctions that would hit poor Nicaraguans. Naturally, they welcomed Trump’s announcement.

Errors in reporting on the tariffs showed opposition journalists’ unfamiliarity with Nicaragua’s economy. Confidencial, in a piece translated and reproduced in the Havana Times, claimed that the tariff imposed on Nicaragua ignored a trade surplus “of $484 million in favor of the US” which “has been growing in recent years.” This completely ignored exports to the US from the free trade zones. The same error was made a day later by Despacho 505.

According to Confidencial, the reason for the higher tariff on Nicaragua (and on Venezuela, hit with a 15 per cent tariff) was to punish their authoritarian governments. In reality, the higher tariffs on both countries resulted from the application of Trump’s formula, but this deliberate misrepresentation was to be repeated.

In an “analysis” for Confidencial on April 4, Manuel Orozco painted the 18 per cent tariff as specifically aimed at the Nicaraguan “dictatorship” (again, linking it with Venezuela). Orozco is a former Nicaraguan now living in Washington, working for the Inter-American Dialogue, an NGO funded by the US government and its arms industry. It is most unlikely that he was unaware of how the tariff was calculated; misleading his readers strengthened his argument that the higher tariff was a purely political move.

Further articles in Despacho 505 and Articulo 66 also blamed political factors without explaining the arithmetic behind the tariff. In La Prensa, activist Felix Maradiaga wrongly remarked that the US accounts for over 60 per cent of Nicaragua’s exports. According to him, the supposed weakness of Nicaragua’s Sandinista government means the country will struggle to cope. (He disregards its remarkable resilience in dealing with the much heavier economic consequences of the 2018 coup attempt and the 2020 pandemic).

Then, also in Confidencial, opposition activist Juan Sebastián Chamorro made the claim that the new tariffs, which of course he welcomes, are entirely compatible with the CAFTA-DR trade treaty. He argued that Washington’s action is justified on grounds of “national security.” This echoes the absurd classification of Nicaragua (during the first Trump administration, continued by Biden) as “an unusual and extraordinary threat to the national security and foreign policy of the United States.”

Opposition media are trying to present the new tariff as the first round of the stronger sanctions on Nicaragua that they have been urging Washington to adopt. They do this regardless of their illegality under the CAFTA-DR trade agreement or wider international law. The possibility of going further – excluding Nicaragua from the treaty – was trailed by Trump’s Latin America envoy, Mauricio Claver-Carone, in January, although he was careful to note the difficulties. But if this were to happen it would delight the opposition even further.

Obsessed with promoting regime change in Managua, these anti-Sandinista activists disregard the effects of tariffs and trade sanctions on ordinary Nicaraguans. On “Liberation Day” Trump showed his indifference to the millions of people in low-income countries whose livelihoods depend on producing food and other products for export to the US. The likes of Orozco, Maradiaga and Chamorro behave in just the same way.

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Briefs
By Nan McCurdy

Better Water Service for Nearly 150,000 People 
The National Assembly approved a loan from the Central American Bank for Economic Integration (CABEI) to the government for US$130 million to finance the improvement and expansion program of four potable water systems in five cities last week. Deputy Wálmaro Gutiérrez said that Nicaragua has made significant progress in potable water and sanitary sewage systems investing US$1.13 billion from 2007 to 2023. “CABEI has been one of the main institutions that has supported the efforts of the Sandinista government in this area,” he added.  The program contemplates the execution of four projects in Ocotal, Diriamba, Camoapa, San Jorge and Buenos Aires, benefitting more than 139,000 inhabitants. The works include the construction of 23 wells, the creation of 26 new pumping stations, the construction of 11 new storage tanks and the rehabilitation of 4 existing tanks with a capacity of 3,201 m³. In addition, three new drinking water treatment plants will be built and two more will be rehabilitated. Also, 360.24 kilometers of pipe networks will be installed and 13,534 new household connections will be made.” (La Primerisima, 2 April 2025)

Historic Generation of Energy with Renewable Sources
In recent years, Nicaragua has been increasing its production of renewable energy. Currently, a record-breaking 80% of the country’s energy production is from renewable sources and it has 30 megawatts installed in solar plants in addition to some 80 megawatts from individual systems in homes, institutions and the agricultural sector. In wind power, the country has an installed capacity of 187 megawatts. In 2025 and 2026, solar generation is projected to reach close to 250 megawatts, with projects strategically located in areas of high radiation such as Malpaisillo, Puerto Sandino, Masaya, Ciudad Darío, Terrabona and San Isidro. Nicaragua is advancing with a projected investment of US$1.26 billion to install 759 megawatts (MW) of electricity generation between 2025 and 2026, according to a recent report on the energy sector. Energy Minister Salvador Mansell, reported that the country closed the first quarter of 2025 with 99.6% electricity coverage, a significant achievement within the framework of the goals established for this year. (La Primerisima, 8 April 2025)

Special Spinal Surgeries for Children at the Vélez Paiz Hospital
Ten children and adolescents from Bluefields, Waslala, Chinandega, Rosita, Estelí, Madriz, León, Matagalpa, Jinotega and Managua will undergo special spinal surgeries between April 8 and 11 at the Dr. Fernando Vélez Paiz Hospital, in order to improve their quality of life. The procedures will be performed by Nicaraguan doctors and specialists from the U.S. organization SpineHope, who are joining this surgical journey to correct spinal deformities. The SpineHope web page states that, “In partnership with host spine surgeon, Dr. Zeyra del Camen Lopez Aguilar and team at the Dr. Fernando Vélez Paiz Hospital in Managua (including Medical Director Dr. Maria Virginia Garcia Almendarez, Dr. Evel Lopez, Dr. Eder Martinez, and Dr. Johana Lissette Galan Lopez), and the Ministry of Health, we are working together to build a pediatric spine program in Nicaragua. In addition to providing charity spine surgery and post-op care to children whose families do not have the resources to pay for costly treatment, this program will also offer training and education to surgeons, medical staff, residents, and medical students in the region on advanced surgical techniques and spine safety protocols.” (La Primerisima, 7 April 2025; https://www.spinehope.org/nicaragua-global-outreach-program)

US Tariffs Hit Latin America and the Caribbean
On April 2, US President Donald Trump announced sweeping “reciprocal” tariffs affecting 180 countries and territories. Most of the countries in Latin America were slapped with Trump’s “baseline tariff” of 10%. However, Nicaragua was hit with 18%, Guyana with 38%, Venezuela with 15%, and the Malvinas Islands with 41%. (Latin American Daily Briefing, 3 April 2025)

Government Evaluates Effects of US Tariff Decisions
On April 3, Co-President Rosario Murillo said that the recent economic and tariff decisions announced by the president of the United States are being analyzed by the country’s national economic teams. Murillo stated that the purpose is to understand their impact and share relevant information with the country’s productive and export sectors.

“On April 2, we learned–the whole world learned—about the decisions on economic and tariff policies, which the president of the United States made about his country’s relationship with the whole world.”  Nicaragua exports its products to the US through the Dominican Republic, Central America Free Trade Agreement (DR-CAFTA), which entered into force in Nicaragua on April 1, 2006. DR-CAFTA established a series of tariff agreements designed to promote trade by progressively reducing or eliminating tariffs among the signatory countries. This process was divided into several product categories with specific time frames for reduction and elimination of tariffs, immediate, 5, 10, 15 or 20 years, depending on the product and the country. Some economic analysts have said that Trump’s tariffs are illegal under DR-CAFTA. (La Primerisima and Informe Pastran, 3 April, 2025)

Law Reformed to Modernize Airport Services
On April 3 the National Assembly approved amendments to the law governing the National and International Airports Administration Company in order to promote savings and efficiency. Deputy Jenny Martinez said that “This reform is very important for the institutional strengthening and strategic development of our country. The reform has a specific objective and that is to consolidate and strengthen the capacities of the National and International Airports Administration Company, which is responsible for operating the existing airports and those to be built in the future, as in the case of the new international airport of Punta Huete, known as Panchito.” (La Primerisima, 3 April 2025)

42,000 Tons of Coffee Exported to Russia and Other Countries
During this year more than 42,000 metric tons of unroasted coffee have been exported to Russia, South America, the European Community and Asia. The Institute of Agricultural Protection and Health (IPSA) has developed a rigorous phytosanitary monitoring program to ensure the quality and sustainability of coffee production in the country. According to an IPSA press release, monitoring efforts were intensified through mobile applications (SAT-CAFÉ) that allow producers to continuously monitor the main pests that affect the crop, effectively guaranteeing the health of crops and the sustainability of plantations. IPSA reported that during the first quarter of this year, 6,863 manzanas (17,157 acres) cultivated with coffee in 185 farms were served and 452 visits were made to monitor pests. The results indicate that there is no relevant pest incidence or phytosanitary risk. (La Primerisima, 4 April 2025)

Third Section of El Rama-El Tortuguero Highway Inaugurated
The Ministry of Transportation and Infrastructure has concluded the construction of the third section of the El Rama-El Tortuguero highway, 26 kilometers long, which will be inaugurated on April 9. The entire important corridor, totaling 96 kilometers in length, will benefit 116,000 people and will unite the development poles of the South Caribbean with the Central and Pacific zones of the country. It will provide facilities for the expansion of agricultural production, boost agro-industrial production and stimulate trade in these productive regions of the country. See photos: https://radiolaprimerisima.com/listo-tercer-tramo-de-carretera-el-rama-el-tortuguero/ La Primerisima, 7 April, 2025

In Solidarity with Palestine, Always!
The Nicaraguan government issued a statement on April 4 announcing that it has decided to discontinue its participation in the proceedings before the International Court of Justice related to the grave violations of the rights of the Palestinian people and State. The statement said that this decision is due to the high financial cost of this participation for a developing country including the economic restrictions that Nicaragua suffers. These factors have made it impossible to continue participation in the case before the World Court where Nicaragua had joined South Africa in accusing Israel of violating provisions of articles VIII and IX of the Genocide Convention. But Nicaragua clarified in the statement that it will continue to support the Palestinian people and State in all other areas within its reach and will not cease to fulfill its international obligations in defense of the brotherly Palestinian people.

Nicaragua reminded states with greater resources that international judicial channels remain open to support the demands for respect for Palestinian rights. Likewise, Nicaragua thanked all the collaborators who have provided assistance in the proceedings before the International Court. The Nicaraguan government reaffirmed its firm commitment to the rule of law at the international level and the peaceful settlement of disputes between states. (La Primerisima, 4 April 2025)