The United States has reached a significant agreement with Guatemala and El Salvador to update their trade frameworks. The deal, which is expected to be finalized soon, will result in the U.S. removing its “reciprocal tariffs” on textile and apparel products imported from both countries under the U.S.’s Dominican Republic-Central America Free Trade Agreement (CAFTA-DR).
For several months, imports from Guatemala and El Salvador have faced a 10 percent duty. Although many goods will continue to be subject to this tariff, there will be exceptions for certain products. Textile and apparel items, as well as “qualifying exports” that cannot be produced in sufficient quantities in the U.S., will be included in the new provisions. The U.S. Trade Representative, Jamieson Greer, described the agreement as a move to lower trade barriers and enhance U.S. access to the Central American market.
Both the Guatemalan and Salvadoran governments have praised the deal. El Salvador’s President Nayib Bukele simply posted “Friends” on X (formerly Twitter) along with the details of the agreement. In a video message, Guatemalan President Bernardo Arévalo emphasized that the agreement strengthens the country’s position as a more competitive and attractive destination for investment.
The trade agreements have been hailed by the textile industry, with leaders expressing their gratitude for the U.S. administration’s actions. Steve Lamar, president of the American Apparel and Footwear Association (AAFA), noted that the deal would reduce costs for American consumers, support U.S. workers, and strengthen regional supply chains, particularly in the textile sector. Kim Glas, president of the National Council of Textile Organizations (NCTO), called it an essential step for U.S. textile industries, adding that it will bring stability to the supply chain.
The NCTO also highlighted the broader benefits of the CAFTA-DR agreement, which supported over $11 billion in trade last year, sustaining more than 470,000 jobs in the U.S. textile sector. Despite the positive reception, Glas and other industry leaders urged the U.S. government to extend similar agreements to other CAFTA-DR countries that still face reciprocal tariffs, such as Honduras, the Dominican Republic, and Costa Rica.
The announcement also comes as the U.S. seeks to reduce reliance on Asian countries, particularly China, in industries such as textiles. NCTO and AAFA leaders continue to call for further action to expand the benefits of the CAFTA-DR framework to other partner nations.
As the trade agreements with Guatemala and El Salvador move toward finalization, industry stakeholders are hopeful that they will lead to more stable trade relations and a stronger economic position for both the U.S. and Central America.
