Honduras, located in Central America, is a country with a growing economy that relies heavily on international trade. As a member of several trade agreements, including the Central American Common Market (CACM), the World Trade Organization (WTO), and free trade agreements with countries like the United States and the European Union, Honduras applies a structured system of import tariffs. The country implements customs tariffs based on the Harmonized System (HS) classification, and import duties vary depending on the product category and its country of origin.
Tariff Structure in Honduras
Honduras applies tariffs according to the Central American Common External Tariff (CET), which applies to all member countries of the Central American Integration System (SICA). The tariff rates applied to imports into Honduras vary depending on the nature of the product:
- 0%: Essential goods such as medicines and certain agricultural inputs.
- 5%: Raw materials and capital goods.
- 10%: Intermediate goods and partially processed items.
- 15%: Finished consumer goods.
- 25%: Luxury goods and non-essential items.
In addition to customs tariffs, imported goods are also subject to Value-Added Tax (VAT) and excise taxes on specific products, such as alcohol, tobacco, and fuel. Special duties may also apply depending on trade agreements or regional policies.
Tariff Rates by Product Category
1. Agricultural Products and Foodstuffs
Agriculture is an important sector in Honduras, and the country imports a wide variety of food products, particularly processed goods. The tariffs on agricultural imports are often higher than for industrial goods, particularly for processed food products.
1.1. Grains and Cereals
- Rice: Honduras imports rice to supplement local production, with a tariff of 10%.
- Wheat and corn: Classified as raw materials, imports of wheat and corn are subject to 5% tariffs.
- Processed cereals: Flour and other processed grains face tariffs of 10% to 15%, depending on the degree of processing.
Special Import Duties:
- Rice from Central American countries: Rice imports from other Central American countries may be duty-free under CACM agreements.
- Rice from non-CACM countries: May face additional duties or higher tariffs if certain quotas are exceeded.
1.2. Dairy Products
- Milk (powdered and fresh): Milk imports are generally taxed at 10%, though VAT applies separately.
- Cheese and butter: Imported cheese and butter face tariffs between 15% and 20%, depending on the country of origin.
- Yogurt and other dairy products: Yogurt and similar dairy imports are typically subject to 10% to 15% tariffs.
Special Import Duties:
- Dairy from non-preferential countries: Imports of dairy products from countries without trade agreements may face additional duties.
1.3. Meat and Poultry
- Beef, pork, lamb: Imported meat is subject to 15% tariffs, with frozen meats often taxed at a higher rate.
- Poultry: Poultry imports, including chicken and turkey, are subject to 15% tariffs.
- Processed meats: Sausages, cold cuts, and other processed meats face tariffs ranging from 10% to 25%, depending on the type and processing level.
Special Import Conditions:
- Frozen meat: Importing frozen meat may involve additional sanitary inspections and import quotas, which could result in higher tariffs.
1.4. Fruits and Vegetables
- Fresh fruits: Fresh fruits face tariffs ranging from 5% to 15%, depending on the type. Tropical fruits such as bananas are typically taxed at a lower rate.
- Vegetables (fresh and frozen): Fresh vegetables are taxed at 5% to 10%, while frozen vegetables face tariffs of 10% to 15%.
- Processed fruits and vegetables: Canned and preserved fruits and vegetables are typically taxed at 10% to 15%.
Special Import Duties:
- Fruits and vegetables from Central American countries: Under CACM, these imports are often duty-free.
2. Manufactured Goods
Honduras imports a significant amount of manufactured goods, including textiles, machinery, and consumer electronics. The tariff rates vary depending on whether the goods are raw materials, intermediate goods, or finished products.
2.1. Textiles and Apparel
- Raw cotton and fabrics: Raw materials used for clothing production, such as cotton and fabrics, are subject to 5% tariffs.
- Clothing (cotton and synthetic): Finished apparel is taxed at 15%, classified as consumer goods.
- Footwear: Imported footwear is taxed at 15% to 25%, depending on the material and type of footwear.
Special Import Duties:
- Textile products from preferential trade partners (e.g., the United States): Under CAFTA-DR (Central America-Dominican Republic Free Trade Agreement), certain textile products may enjoy duty-free access.
- Clothing from non-preferential countries: Additional tariffs may be applied to protect local industries.
2.2. Machinery and Electronics
- Industrial machinery: Machinery used for agriculture, construction, or manufacturing is taxed at 5%, as these are considered capital goods.
- Consumer electronics: TVs, radios, and mobile phones face tariffs of 15%, reflecting their status as consumer goods.
- Computers and peripherals: Computers and related peripherals typically face 0% to 5% tariffs, with VAT applied separately.
Special Import Conditions:
- Electronics from non-CACM countries: Special duties may apply depending on the country of origin and trade agreements in place.
2.3. Automobiles and Automotive Parts
- Passenger vehicles: Imported cars are subject to 25% tariffs, reflecting their classification as luxury goods.
- Trucks and commercial vehicles: Tariffs on trucks and other commercial vehicles range between 10% and 15%, depending on size and type.
- Automotive parts: Imported automotive parts and accessories are typically taxed at 10% to 15%.
Special Import Duties:
- Used vehicles: Honduras has restrictions on the import of used vehicles, including higher tariffs to discourage the import of older models.
3. Chemical Products
Chemical products are critical imports for both the industrial and healthcare sectors in Honduras. Tariff rates vary depending on the type of chemical and its intended use.
3.1. Pharmaceuticals
- Medicines: Essential medicines, such as antibiotics, are typically subject to 0% tariffs to ensure affordable healthcare access.
- Non-essential pharmaceuticals: Non-essential medicines and over-the-counter healthcare products face tariffs of 5% to 10%.
Special Import Duties:
- Pharmaceuticals from CACM countries: Preferential treatment is provided, with reduced or zero tariffs under CACM agreements.
3.2. Fertilizers and Agricultural Chemicals
- Fertilizers: Fertilizers are generally taxed at 5%, as they are classified as raw materials essential for agriculture.
- Pesticides and herbicides: Agricultural chemicals face tariffs between 10% and 15%, depending on their classification and toxicity.
4. Wood and Paper Products
Honduras imports a variety of wood and paper products, including lumber and processed paper for printing and packaging.
4.1. Lumber and Timber
- Raw timber: Raw lumber is subject to 5% tariffs, as it is classified as a raw material.
- Processed wood: Imports of processed wood, such as plywood and veneer, face tariffs of 10% to 15%, depending on the level of processing.
Special Import Duties:
- Timber from Central American countries: Duty-free access may be available under CACM agreements.
4.2. Paper and Paperboard
- Newsprint: Newsprint and uncoated paper are generally taxed at 5%, supporting the local publishing industry.
- Coated paper: Coated paper, including glossy and high-quality paper products, faces tariffs of 10%.
- Packaging materials: Paperboard and other packaging materials are typically taxed at 10% to 15%.
5. Metals and Metal Products
The construction and manufacturing sectors in Honduras rely on metal imports, including both raw and processed metal products.
5.1. Iron and Steel
- Raw steel: Imports of raw steel are taxed at 5%, as they are classified as raw materials essential for industrial use.
- Finished steel products: Steel bars, beams, and pipes face tariffs between 10% and 15%, depending on the level of processing.
5.2. Aluminum
- Raw aluminum: Raw aluminum imports are subject to 5% tariffs.
- Aluminum products: Finished aluminum products, such as sheets and cans, are taxed at 10% to 15%.
Special Import Duties:
- Steel and aluminum from non-CACM countries: Additional duties may apply depending on trade policies and anti-dumping measures.
6. Energy Products
Energy products, including fossil fuels and renewable energy equipment, are essential imports for Honduras’ growing energy needs.
6.1. Fossil Fuels
- Crude oil: Imports of crude oil are subject to 0% tariffs, as they are essential for energy production.
- Refined petroleum products: Gasoline, diesel, and other refined products face tariffs of 5% to 10%, with additional excise duties applied.
- Coal: Coal imports are typically taxed at 5% for industrial use.
6.2. Renewable Energy Equipment
- Solar panels: To promote the development of renewable energy, solar panels are often subject to 5% tariffs.
- Wind turbines: Wind energy equipment is generally duty-free to support renewable energy initiatives in Honduras.
Special Import Duties by Country
1. CACM Member States
As part of the Central American Common Market (CACM), Honduras benefits from duty-free trade with other Central American countries. Goods imported from CACM member states are generally not subject to customs duties, provided they meet rules of origin requirements.
2. United States
Under the CAFTA-DR (Central America-Dominican Republic Free Trade Agreement), many goods imported from the United States benefit from reduced tariffs or duty-free access. This agreement covers a wide range of products, including agricultural goods, textiles, and machinery.
3. European Union (EU)
Honduras has an Association Agreement with the European Union, which provides preferential access for certain goods imported from the EU. Under this agreement, many EU products, particularly industrial goods, benefit from lower tariffs or duty-free access.
4. China
China is one of Honduras’ largest trading partners. Standard CET tariffs apply to most Chinese goods, although additional duties may be imposed on specific products such as textiles, electronics, or steel, especially if they are deemed to undercut local industries.
5. Developing Countries
Honduras benefits from preferential tariff treatment under the Generalized System of Preferences (GSP), which allows reduced tariffs or duty-free access for certain goods imported from eligible developing countries. This preferential treatment is typically extended to essential goods such as agricultural products and textiles.
Country Facts: Honduras
- Formal Name: Republic of Honduras (República de Honduras)
- Capital City: Tegucigalpa
- Largest Cities:
- Tegucigalpa
- San Pedro Sula
- La Ceiba
- Per Capita Income: $2,600 (2023 estimate)
- Population: 10 million (2023 estimate)
- Official Language: Spanish
- Currency: Honduran lempira (HNL)
- Location: Central America, bordered by Guatemala, El Salvador, Nicaragua, and the Caribbean Sea.
Description of Honduras’ Geography, Economy, and Major Industries
Geography
Honduras is situated in Central America and is bordered by Guatemala to the west, El Salvador to the southwest, Nicaragua to the southeast, and the Caribbean Sea to the north. The country has a diverse geography that includes tropical rainforests, mountain ranges, and fertile plains. Its extensive coastline along the Caribbean and Pacific provides access to important trade routes.
Economy
Honduras has a developing economy, with agriculture, manufacturing, and services being key sectors. Agriculture is one of the country’s most significant industries, with products such as bananas, coffee, and palm oil being major exports. In recent years, manufacturing has expanded, particularly in textiles and clothing through maquila operations (export processing zones).
The tourism sector is also growing, driven by the country’s natural beauty, beaches, and cultural heritage. Despite these positive developments, Honduras faces challenges related to poverty, inequality, and infrastructure.
Major Industries
- Agriculture: The agriculture sector remains vital, with Honduras being a major producer of bananas, coffee, palm oil, and seafood.
- Manufacturing: The textile and apparel industry is one of the largest employers in the manufacturing sector, with products exported mainly to the U.S. under CAFTA-DR.
- Mining: Honduras has significant mining operations, with gold, silver, zinc, and lead among its key mineral exports.
- Tourism: Tourism is growing, especially in coastal regions such as the Bay Islands, known for their coral reefs and diving opportunities.
- Energy: The energy sector, including hydropower and emerging renewable energy initiatives, is playing an increasingly important role in the country’s economic development.
