US moves could drive Nicaragua closer to China

Significance

The investigation could reportedly see tariffs reintroduced on certain products or Nicaragua’s temporary suspension from the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). Such measures would hit the economy of Nicaragua, which counts the United States as its main trade partner.

Impacts

• Ortega may use Nicaragua’s role as a facilitator of US-bound migration to counter US economic pressure.
• Increasing authoritarianism will worsen human rights concerns in Nicaragua and encourage political opponents to go into exile.
• Ortega will continue to face limited pushback from other Central American leaders.