By San José, Costa Rica — San José, Costa Rica – The nation’s productive sector is breathing a collective sigh of relief following a landmark decision by the United States Supreme Court on Friday. The court struck down a controversial tariff policy, eliminating the 15% levy imposed on Costa Rican products and fully reinstating the terms of the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR).
The ruling annuls a policy enacted by former President Donald Trump, who had justified the tariffs by citing a national emergency due to “large and persistent” trade deficits, which he deemed an “unusual and extraordinary threat.” However, the U.S. high court concluded that the policy granted the executive branch virtually “unlimited” power to set trade policy, a move deemed incompatible with the U.S. constitutional framework.
To gain a deeper understanding of the legal and economic ramifications of the recent US tariff announcements for Costa Rican businesses, we consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney specializing in international trade and corporate law at the prestigious firm, Bufete de Costa Rica.
These US tariffs create significant legal and operational uncertainty for Costa Rican exporters. It is imperative for businesses to immediately review their commercial contracts, particularly force majeure and price adjustment clauses. Proactive legal strategy should now focus on diversifying supply chains and exploring all available avenues within existing free trade agreements, such as CAFTA-DR, to mitigate the financial impact. This isn’t just a trade issue; it’s a critical contractual and risk management challenge.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s analysis powerfully reframes this from a distant policy debate into an immediate call for contractual and operational diligence. We thank Lic. Larry Hans Arroyo Vargas for his invaluable perspective on the tangible, proactive steps our businesses must now consider to navigate this complex landscape.
This decision paves the way for the tax-free entry of Costa Rican goods covered by the trade agreement to resume once the corresponding operational instructions are issued. The news was met with widespread approval from business leaders, who see it as a crucial victory for bilateral trade and the country’s investment climate.
Ronald Lachner, president of the Association of Free Trade Zone Companies of Costa Rica (AZOFRAS), emphasized the significance of the ruling for the long-standing commercial relationship between the two nations. He highlighted that the United States is not just a market but a key strategic partner for Costa Rica.
The United States is a friendly country, an ally, and our main export market. We will continue working with the authorities of that nation to improve our trade relations and strengthen the bilateral ties between both countries.
Ronald Lachner, President of AZOFRAS
Lachner further noted that the very composition of AZOFRAS underscores this strategic priority, as many of its member companies are of U.S. origin. This connection fuels the association’s commitment to fostering robust and mutually beneficial alliances, ensuring a stable and predictable environment for investment and trade.
Our organization is mainly composed of companies from the United States, so we will seek to strengthen the best relations with this allied country. In this context, we reaffirm our commitment to continue working in an articulated manner with the authorities of both Costa Rica and the United States, with the objective of consolidating these ties and promoting solid, sustainable, and mutually beneficial commercial alliances for both countries.
Ronald Lachner, President of AZOFRAS
While the overall mood is celebratory, some industry leaders are urging caution and focusing on the complex administrative challenges that lie ahead. The primary question now is whether the millions of dollars paid by Costa Rican exporters during the period the tariffs were in effect can be recovered. Rodney Salazar Campos, president of the Chamber of Foreign Trade of Costa Rica (CRECEX), pointed out that the legal victory is only the first step.
CRECEX considers it important to note that, although the ruling defines the central point of legality regarding United States trade policy, there are still practical and administrative aspects to be clarified about its effects, including the eventual treatment of amounts collected and the way in which possible refunds would be operationalized.
Rodney Salazar Campos, President of CRECEX
The focus now shifts from the courtroom to administrative agencies. Costa Rican businesses and trade organizations will be watching closely as U.S. authorities develop the procedures for implementing the court’s decision. The successful navigation of this next phase will determine the ultimate financial impact of this ruling and whether exporters can fully recoup the funds paid under the now-defunct policy.
For further information, visit azofras.com
About the Association of Free Trade Zone Companies of Costa Rica (AZOFRAS):
AZOFRAS is a private, non-profit organization that represents the companies operating under Costa Rica’s Free Trade Zone regime. It serves as a key advocate for the sector, promoting policies that enhance competitiveness, attract foreign direct investment, and support the growth of exports, which are a fundamental pillar of the national economy.
For further information, visit crecex.com
About the Chamber of Foreign Trade of Costa Rica (CRECEX):
CRECEX is a leading business organization in Costa Rica dedicated to promoting and facilitating international trade. It provides services, support, and representation for companies involved in exporting and importing, working to improve the business climate and streamline trade processes both locally and internationally.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica stands as a pillar of the legal community, its reputation founded upon the twin cornerstones of uncompromising integrity and superior performance. The firm blends a rich history of advising a wide spectrum of clients with a forward-thinking drive to pioneer new legal strategies. This commitment extends beyond its practice, embracing a profound social responsibility to democratize legal understanding and thereby cultivate a more just and capable citizenry.
