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Arturo Peguero
By Arturo Peguero | International Trade Specialist | Former Dirección de Comercio Exterior | Former International Trade Professor
CAFTA-DR entered into force on March 1, 2007. In 2026, the last remaining tariff phase-downs under the agreement reach zero. For buyers sourcing from the Dominican Republic, this is not just a policy milestone — it is a structural shift in the cost equation for US-DR trade.
When CAFTA-DR was signed, tariff reductions were staggered across four baskets. The most sensitive product categories — the ones with the longest phase-out windows — were given up to 20 years to reach zero. Those final reductions are completing now.
The practical result: every major Dominican Republic export category now enters the United States duty-free under CAFTA-DR, provided the goods meet rules-of-origin requirements. That includes:
Fresh produce — mango, avocado, tropical fruit (wholly obtained in the DR)
Cacao and chocolate derivatives — the DR supplies roughly 70% of the world's fine flavor cacao
Premium cigars — the DR is the world's #1 premium cigar exporter ($1.36 billion in 2025)
Cosmetics and personal care — Caribbean botanicals driving private label demand
Medical devices — ISO and FDA-compliant manufacturing in free trade zones
For a detailed breakdown of how rules of origin work under CAFTA-DR — including "wholly obtained," "tariff shift," and regional value content thresholds — see our guide to Dominican Republic country of origin requirements.
On February 24, 2026, the United States imposed a 10% blanket import tariff under Section 122 of the Trade Act of 1974.
The 10% Section 122 tariff runs through July 24, 2026. When it expires, non-FTA origins revert to MFN duty rates — real, ongoing costs that vary by product category. Dominican Republic-origin goods under CAFTA-DR stay at 0% permanently. That rate doesn’t sunset with Section 122.
This is not a temporary promotion. CAFTA-DR is institutional trade infrastructure — nearly two decades old — and the final phase-out makes the 0% rate permanent across all remaining product lines. Buyers building supply chains around DR origins aren’t capturing a temporary window. They’re locking into the lowest available tariff rate for the long term.
Dominican Republic exports hit a record $14.65 billion in 2025, up 13.4% year-over-year. The trade corridor is deep, proven, and growing.
A note on renegotiation risk: The US has discussed renegotiating CAFTA-DR terms with Honduras and Nicaragua. The Dominican Republic is not currently targeted, but buyers should monitor developments. Trade policy is moving fast in 2026.
The CAFTA-DR tariff story is important. But the bigger story is what 20 years of continuous trade built behind those tariffs: compliance infrastructure, logistics networks, and a supplier base that has been exporting at scale for two decades.
Cigars: Record $1.36 billion in 2025 exports — the DR produces more premium cigars than any country in the world
Mango: Exports doubled from $20 million to $50 million between 2020 and 2024, with Promango targeting a further 30% increase in 2026
Free trade zones: 67% of national trade, $8 billion+ in exports, with Fortune 500 companies operating across 3 million+ square meters of capacity
Logistics: Sea freight from Dominican ports to Miami runs 3–5 days — among the shortest origin-to-US transit times in Latin America
This is not an emerging sourcing market. It is a mature, low-friction trade corridor with established customs procedures, proven certification standards (GlobalG.A.P., FDA, ISO), and exporters who have been shipping to the US and Europe for years. For a full overview of the top export categories, see our guide to the top products to source from the Dominican Republic in 2026.
1. Auditing supplier geography for tariff exposure. If you are sourcing a product category where Dominican producers compete — fresh produce, cacao, cosmetics, processed foods, cigars — the permanent 0% CAFTA-DR rate vs. MFN rates for non-FTA origins is a structural cost arbitrage. Run the numbers against your current supplier mix.
2. Locking in DR supplier relationships before capacity fills. Record export growth means capacity is filling. In fresh produce, early-season buyers secure better pricing and allocation — mango season is open now through August. Buyers who wait until peak season face tighter supply and higher FOB prices.
3. Building redundancy with CAFTA-DR origins. Trade policy is volatile in 2026. CAFTA-DR has nearly 20 years of bipartisan institutional support. Buyers building multi-origin supply chains should weight stability — and the Dominican Republic offers one of the most established preferential trade relationships the US has in the Caribbean.
DominicanSources works directly with verified Dominican Republic exporters across fresh produce, cosmetics, cacao, and more. Every supplier in our network has been interviewed and vetted — not just listed from a directory.
→ Send us a sourcing inquiry and we'll match you with the right supplier for your product, volume, and certification requirements.
For the full framework on vetting and engaging DR suppliers, see our buyer's guide to sourcing from the Dominican Republic.
CAFTA-DR (Dominican Republic-Central America Free Trade Agreement) is a trade agreement between the United States, the Dominican Republic, and five Central American countries. It entered into force for the Dominican Republic on March 1, 2007, and has been eliminating tariffs on a phased schedule over the past two decades.
With the final phase-out completing in 2026, all major DR export categories now qualify for 0% duty, including fresh produce, cacao, cigars, cosmetics, medical devices, and processed foods — provided they meet CAFTA-DR rules of origin. Confirm specific tariff classifications with your customs broker.
The US has discussed renegotiating CAFTA-DR terms with Honduras and Nicaragua. The Dominican Republic is not currently named in those discussions. However, trade policy is shifting rapidly in 2026, and buyers should monitor developments through official trade channels.
The 10% Section 122 tariff runs through July 24, 2026. When it expires, non-FTA origins revert to MFN duty rates. Dominican Republic-origin goods under CAFTA-DR remain at 0% permanently — that rate does not sunset with Section 122.