concept

CAFTA-DR

Also known as: Dominican Republic-Central America Free Trade Agreement

Facts (10)

Sources

Tracking Trump's Trade Deals | Council on Foreign Relations cfr.org Inu Manak, Allison J. Smith · Council on Foreign Relations Mar 17, 2026 10 facts

claimThe framework agreement between the United States and El Salvador is a pared-down version of the agreement between the United States and Ecuador, likely because the existing CAFTA-DR agreement already eliminates most trade barriers.

claimProducts from Canada and Mexico that comply with the U.S.-Mexico-Canada Agreement, as well as apparel and textiles originating from CAFTA-DR countries (Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua), are exempt from Section 122 tariffs.

perspectiveWill Freeman, a Council on Foreign Relations fellow for Latin America studies, argues that El Salvador will likely benefit less from the U.S.-El Salvador Agreement on Reciprocal Trade than Argentina or Ecuador will from their respective deals, noting that the agreement may weaken CAFTA-DR and encourage other members to seek bilateral deals with the Trump administration.

claimThe U.S.-El Salvador framework agreement does not specify a new tariff baseline, but the United States agreed to tariff exemptions for items that cannot be grown, mined, or naturally produced in the United States in sufficient quantities, as well as for certain products originating in CAFTA-DR, such as textiles and apparel.

claimThe United States agreed to tariff exemptions for items 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 in CAFTA-DR.

claimThe preamble of the U.S.-El Salvador Agreement on Reciprocal Trade defines the agreement as a complement to the rights and obligations established under the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR).

measurementProducts that do not meet the CAFTA-DR rules of origin are subject to a reciprocal tariff rate of 10 percent under the U.S.-El Salvador Agreement on Reciprocal Trade.

claimThe U.S.-Guatemala Agreement on Reciprocal Trade is nearly identical to the El Salvador Agreement on Reciprocal Trade, sharing preambular language, CAFTA-DR tariff exemptions, and exemptions for agricultural products.

claimThe U.S.-El Salvador Agreement on Reciprocal Trade provides a reciprocal tariff exemption for goods that qualify as originating under the rules of origin of the CAFTA-DR, marking the first time the United States has provided this specific exemption to an existing Free Trade Agreement partner.

claimThe U.S.-El Salvador Agreement on Reciprocal Trade includes a specific commitment for El Salvador to treat exports of worn clothing as originating under the CAFTA-DR rules.