Paraguay Escapes US Tariffs as 60 Nations Face New Duties
Paraguay · Trade
Key Facts
—Targeted countries About 60 trading partners were named in the new US tariff round, but Paraguay was not among them.
—Tariff rates The new duties range from 10% to 12.5% and take effect just after midnight on July 24, 2026.
—Policy rationale Washington framed the tariffs as a tool to enforce compliance on forced-labor concerns, not a blanket measure.
—Expiring surcharge A separate 10% Section 122 surcharge on most imports is scheduled to expire on the same day, July 24, 2026.
—Regional lobbying Several Latin American governments and steelmakers had been urging Washington to grant them exemptions.
Paraguay has secured a Paraguay US tariff exemption from a new round of American import duties, according to international trade reports. The administration of U.S. President Donald Trump unveiled a tariff package in early July 2026 targeting about 60 trading partners, but the South American nation was conspicuously absent from the list.
Paraguay US tariff exemption: A Targeted, Not Universal, Tariff Action
The new U.S. tariffs, reported by Reuters on July 7, 2026, impose duties in the range of 10% to 12.5% on a wide swath of goods. They are scheduled to take effect just after midnight on July 24, 2026, adding a fresh layer of complexity to global trade.
Unlike a blanket measure, the action was designed to penalize countries seen as failing to stop imports made with forced labor. Because Paraguay was not identified as a problem case under this specific enforcement logic, it was effectively outside the scope of the announced action.
For readers unfamiliar with how modern U.S. trade enforcement works, forced-labor provisions allow Washington to block or penalize goods linked to human-rights abuses in supply chains. Rather than raising costs across the board, this approach singles out jurisdictions where official reviews have flagged systemic problems. That Paraguay was left off the list suggests its export sectors did not trigger those specific red flags during the review period leading up to the July announcement.
Why Paraguay Was Left Out
The administration’s rationale centered squarely on forced-labor enforcement concerns. Countries that could demonstrate they were not part of the enforcement target, or that were simply not flagged, avoided the new duties.
Available sources do not name Paraguay as one of the jurisdictions singled out. The late-July reporting describes the measure as focused on other Latin American suppliers and on products associated with labor-compliance failures.
While a more granular official reason was not immediately available, the exclusion spares Paraguayan exporters from a direct cost increase that competitors in the region now face.
In practical terms, a tariff of 10% to 12.5% can erase the price advantage of commodity exports such as soy, beef, or steel inputs. For Paraguayan producers, avoiding that margin squeeze means their goods remain on a more equal footing with domestic US. suppliers and with other non-targeted nations.
It also preserves the commercial relationships that Paraguay has built over years of steady, if low-profile, trade diplomacy.
A Shifting US Tariff Landscape
The new duties land in an already unsettled trade environment. A separate 10% Section 122 surcharge on most imports, which began on February 24, 2026, is scheduled to expire on the very same day the new tariffs take effect – July 24, 2026.
That temporary surcharge was imposed to address fundamental international payments problems, according to a White House proclamation. Its expiration could offset some of the new cost burdens for global shippers, but the overlapping deadlines create significant uncertainty for supply-chain planners.
Section 122 of the Trade Act of 1974 is a rarely used tool that gives the president broad authority to impose temporary import surcharges when the US. faces a balance-of-payments crisis. Its scheduled sunset on July 24 means that importers who have been paying that extra 10% since February may see their total duty bill drop, even as the new forced-labor tariffs begin.
How those two changes net out for any given shipment will depend on the product, the country of origin, and whether it falls under both measures.
For foreign investors and expats watching Latin America, the shifting deadlines mean that the tariff landscape can change within hours, making country-level exemptions like Paraguay’s especially valuable.
Regional Fallout and Lobbying Efforts
Several Latin American governments and steelmakers had been actively lobbying Washington to grant them exemptions, Reuters reported. They argued that the new duties would harm trade ties and that some countries did not warrant punishment.
The broader policy logic, as framed in the reporting, was that the U.S. was using tariffs as leverage over labor-enforcement compliance rather than applying them uniformly across all Latin American economies.
Paraguay’s absence from the target list suggests its diplomatic and commercial positioning aligned with Washington’s enforcement priorities, at least for this round.
The lobbying efforts by other Latin American nations highlight how high the stakes were. Steelmakers in particular operate on thin margins where a 10% duty can mean the difference between winning and losing a long-term contract.
That Paraguay did not need to mount a last-ditch lobbying campaign—or did so quietly and successfully—raises questions about what diplomatic channels or trade data may have worked in its favor.
What It Means for Business and Investment
For companies with supply chains in the Southern Cone, the exemption makes Paraguay a comparatively more predictable sourcing base. Goods shipped from Paraguay avoid the 10% to 12.5% duty that now applies to competitors in targeted nations.
The development may also strengthen Paraguay’s appeal as a nearshoring destination. Investors evaluating regional manufacturing or agricultural export hubs often weigh tariff exposure as a key site-selection factor.
Still, trade policy remains fluid. The expiration of the Section 122 surcharge and the new forced-labor tariffs taking effect on the same day could prompt further adjustments, and exemptions can be reviewed as enforcement priorities shift.
What to watch next is whether the US. publishes a formal list of compliant and non-compliant countries, and whether Paraguay’s exemption holds if the enforcement net widens. Another open question is how Paraguay’s regional competitors—especially those now facing the new duties—will adjust their export strategies, and whether they will redirect goods to markets where Paraguay also competes.
Finally, the simultaneous expiration of the Section 122 surcharge could create a brief window of recalibrated pricing; whether that benefits Paraguayan exporters or simply reshuffles the competitive order remains to be seen.
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Frequently Asked Questions
Why was Paraguay exempted from the new US tariffs?
Paraguay was not among the roughly 60 trading partners targeted because the tariffs were aimed at countries seen as failing to stop imports made with forced labor, and Paraguay was not flagged as a problem case.
When do the new US tariffs take effect?
The new duties, ranging from 10% to 12.5%, are scheduled to take effect just after midnight on July 24, 2026, the same day a separate 10% Section 122 surcharge is set to expire.
How does the Paraguay exemption affect foreign investors?
It makes Paraguay a more predictable export base by sparing its goods from the new duties, potentially boosting its attractiveness for nearshoring and supply-chain diversification in South America.
Sources: Reuters.
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