An additional United States tariff of 12.5% on certain Costa Rican goods took effect at 12:01 a.m. Eastern time today, at the same moment the temporary 10% surcharge that had applied for 150 days expired. The new rate replaces the old one rather than stacking on top of it, which means the real increase for goods still covered by the measure is 2.5 percentage points, not 22.5%.
The tariff comes out of an investigation opened under Section 301 of the US Trade Act of 1974, which examined whether trading partners prohibit and effectively enforce restrictions on imports of goods made wholly or partly with forced labour. Washington concluded that Costa Rica lacks such a prohibition and the mechanisms to enforce one.
Costa Rica was placed at the top of the resulting range alongside Chile, Colombia, Peru, Brazil, the Dominican Republic, Nicaragua and Venezuela. Mexico, Guatemala, Honduras and El Salvador were assigned the lower 10% rate.
What is actually taxed
The measure applies to specified goods only, not to everything Costa Rica ships north. Which products fall inside it depends on their tariff classification under the US Harmonized Tariff Schedule, and the annexes attached to the decision define both the covered lines and the carve-outs. Free-zone manufacturing and general industrial exports carry the heaviest exposure, since much of the country’s agricultural output sits on the exempt list.
Because coverage is decided line by line, two products from the same factory can end up on opposite sides of the boundary. Exporters have been advised to confirm classification directly with their US importers before assuming either that they are hit or that they are safe.
What is exempt
Coffee, pineapple, bananas and orange juice keep the exclusions they already held. Washington widened the list before the tariff took effect to add cuttings, vegetable and fruit seeds, and certain refined sugars. Semiconductors, medical devices, pharmaceuticals and electronic equipment also sit outside the measure, as do goods covered by sector-specific agreements and certain textiles and apparel that satisfy rules of origin and enter duty-free under the Central America–Dominican Republic Free Trade Agreement.
Taken together, the exclusions cover most of what a casual observer would name as Costa Rica’s leading exports, which is why the immediate response from trade bodies has been to urge a careful reading of the annexes rather than a blanket assumption of damage.
The grace period for goods already at sea
Shipments that were loaded and already in transit to the United States before the tariff took effect are not caught by it, provided they are entered for consumption before 28 July and meet the other conditions set by US authorities. That is a narrow window. A container that left a Costa Rican port on 22 July and clears US customs on 27 July pays the old rate. The same container held at the border until 29 July pays the new one.
The deadline turns on entry for consumption, not arrival, so goods sitting in a bonded warehouse or awaiting paperwork can lose the exemption even though they physically arrived in time. Timing of the customs entry, not the sailing date, is what settles the question.
What it does and does not do to CAFTA-DR
The free trade agreement has not been suspended, renegotiated or voided. Its preferential rates remain the baseline, and its rules of origin still govern which goods qualify. What has happened is that a separate surcharge, imposed under a domestic US trade statute, now sits on top of that baseline for the product lines it covers.
That distinction matters for anyone reading the measure as the end of duty-free access. It is not. For excluded products, CAFTA-DR treatment continues to deliver zero tariffs, and in the case of qualifying textiles and apparel the agreement’s rules of origin are the very thing that keeps them out of the new tariff.
For covered products, the agreement’s preference is still applied and the 12.5% is charged in addition to it. The practical effect is a two-track relationship in which the treaty governs access while the Section 301 finding sets a separate cost on part of the trade.
Removing that cost would require either a revision of the assigned rate or a change in how Washington assesses Costa Rica’s enforcement of forced-labour restrictions. Neither is a treaty question.
How Costa Rica is responding
The Ministry of Foreign Trade, Comex, said the country is recognised for its commitment to rules-based international trade and respect for labour rights, and that it will keep working with the productive sector and US authorities to improve access for Costa Rican products. Trade Minister Indiana Trejos had argued during the public consultation period, which closed on 6 July, that the investigation produced no evidence of forced labour in Costa Rican supply chains, and Comex had asked Washington to preserve the agreement’s duty-free preferences.
The foreign trade chamber Crecex called for technical analysis rather than alarm, stressing that the effective increase is 2.5 percentage points and that the exclusion list is extensive. It asked Comex to continue negotiating to clarify the scope of the measure and to establish what would allow Costa Rica’s assigned rate to be reviewed, and offered to convene a working group with the private sector to identify affected products and quantify the impact on exports, employment and investment.
The free-zone association Azofras, which represents more than 600 companies employing roughly 300,000 people, used the moment to press a domestic argument. In an international environment it described as unpredictable, the association said Costa Rica needs to move faster on reducing production costs, securing competitively priced electricity, adjusting working hours to production needs and improving workforce training. Its point was that the tariff is a variable the country cannot control, while the cost of manufacturing inside Costa Rica is one it can.
Attention now turns to how many product lines fall inside the measure once classifications are worked through, and whether Comex can get either a review of the 12.5% rate or a further widening of the exclusions. Both depend on decisions taken in Washington, and neither is likely to be settled quickly.
