CAFTA Qualifying Apparel From Guatemala, El Salvador to Be Duty-Free

Dropping tariffs on commodities not grown in the U.S. was expected after a September executive order issuing a list of commodities that could get a tariff break if countries negotiated deals. However, the change that had not been telegraphed is that the U.S. will stop imposing a 10% tariff on textile and apparel goods from El Salvador and Guatemala, as long as they meet CAFTA-DR rules of origin.

With identical language in the frameworks published Nov. 13, the U.S. said, "Given El Salvador’s [or Guatemala's] commitment to take significant steps to advance a stronger and more reciprocal trade relationship, the United States will remove the reciprocal tariffs on El Salvador’s exports to the United States for certain qualifying exports that cannot be grown, mined, or naturally produced in the United States in sufficient quantities, as well as certain products, such as textiles and apparel products, originating under the CAFTA-DR."

A senior administration official, in response to a question about apparel tariffs from International Trade Today, said the administration recognizes that "the Central American supply chain for textiles is quite important to American cotton producers." He said cut-and-sew operations happen in Central America; some of those items are made with U.S. yarn or fabric. "We certainly want to have textile supply chains as close to the United States as possible," he said.

"Part of the reason we're doing that is because we actually do have a robust textile industry in the United States," he said. He acknowledged that, as the president said, we're not going to reshore all apparel production, "we have textile mills. We grow cotton here."

The National Council of Textile Organizations, which represents domestic fabric mills and yarn producers, hailed the announcement. NCTO CEO Kim Glass put out a statement that said her group and members had been lobbying for the reinstatement of duty-free treatment for qualifying CAFTA-DR apparel goods.

"We continue to press for a resolution for the other trade partners, including Honduras, the Dominican Republic and Costa Rica, while acknowledging that the administration is conducting an extensive review under Section 301 of Nicaragua and their human rights violations under a separate track," she said.

She said that there was more than $11.3 billion in two-way trade in textiles between CAFTA countries and the Dominican Republic in 2024, supporting 470,000 U.S. domestic textile jobs.

"However, since reciprocal tariffs were imposed on qualifying CAFTA-DR trade, U.S. textile and apparel imports from our free trade partner countries have declined 8% year to date in 2025 through July, while U.S. imports from top Asian suppliers have increased by double digits," she wrote.

The announcements will be followed by full agreements within roughly two weeks, the official said. No specifics on tariff lines that will be removed from reciprocal tariffs were released Nov. 13.

Argentina also has a trade surplus with the U.S., though it doesn't have a free-trade agreement. Its framework said: "Argentina will provide preferential market access for U.S. goods exports, including certain medicines, chemicals, machinery, information technologies products, medical devices, motor vehicles, and a wide range of agricultural products. In recognition of Argentina’s ambitious reform agenda and its trade commitments, and consistent with Argentina’s compliance with relevant supply chain and economic security requirements, the United States will remove the reciprocal tariffs on certain unavailable natural resources and non-patented articles for use in pharmaceutical applications."

The frameworks said the U.S. "may positively consider" exports from all the countries that fall under Section 232 trade actions.

The tariff removals for Ecuador are larger because that country has a small trade deficit, the administration official said.

"These are exactly the kinds of deals that the President is trying to strike to help balance out our trade relationships with some countries. With some countries, we have significant deficits, with others we have small surpluses -- overall, we have a global trade deficit. That means we need to export more, and we need to continue to control access to our market through the use of a tariff."

He said that trade irritants, such as agricultural standards or other non-tariff barriers, had been intractable for 25 years or more, and while persuasion had not worked, the tariffs resolved them.

U.S. Trade Representative Jamieson Greer said in a statement, "President [Donald] Trump’s leadership is forging a new era of partnership and prosperity across the Western Hemisphere, further advancing the economic and national security interests of the American people."

Reporters on a call with the administration official asked about how much coffee prices might drop as the tariffs come off. "With respect to price effects, I would say that a lot of the prices of coffee and cocoa and some of these other things have been trending over for a long time due to weather events," he said, but added "our expectation is that there'll be some positive effects for prices for things like coffee, cocoa, bananas. ... But hopefully this is something that is a good, common sense approach to trade policy. We can protect our domestic production, or we don't have domestic production. We don't necessarily have to have a tariff."