US to reinstate duty-free benefits for Guatemala and El Salvador imports

The US government has confirmed plans to reinstate duty-free treatment for qualified textile and apparel goods from Guatemala and El Salvador as part of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR).

In order to reestablish the agreement, both regions were required to commit to a number of changes regarding trade with the US, as detailed by the White House.

Among those, the countries committed to “addressing a wide range of non-tariffs barriers affecting trade in priority areas”; preventing barriers to US agricultural products in their respective markets; and the reinforcement of protection over internationally recognised labour rights.

In return, the US has removed reciprocal tariffs on certain qualifying exports from both regions that cannot be sufficiently grown, mined or naturally produced in the US, as well as certain products such as textiles and apparel products.

The US will now work with both Guatemala and El Salvador to finalise the agreement, prepare it for signature and undertake formalities prior to the deal being enforced.

The announcement has been welcomed by textile organisations in the US, including the National Council of Textile Organisations (NCTO), the president and CEO of which, Kim Glas, said pushing for such a reinstatement has long been a demand of the industry.

Glas noted that the CAFTA-DR region “forms a virtual co-production chain with the American textile supply chain, facilitating 11.3 billion dollars in two-way trade in 2024”.

She added that since the introduction of reciprocal tariffs, free trade from partnered countries has dropped 8 percent in 2025 through July, while US imports from Asian suppliers have increased by double digits. The deal’s restoration is therefore a “critical key first step” in bolstering the US textile supply chain and bringing stability to the sector, Glad continued.

NCTO will now work for similar resolutions for other trade partners, including Honduras, the Dominican Republic and Costa Rica.