diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1693d8d..8b2cfe4 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -8,6 +8,12 @@
 ### Removed
 ### Added
 
+## [7.17.1] - 2024-01-05
+
+### Fixed
+
+- Set `ESMF_TRACE_LIB_BUILD=OFF` when building ESMF 8.6.0 with NAG to avoid a build error
+
 ## [7.17.0] - 2023-12-01
 
 ### Updates
diff --git a/VERSION b/VERSION
index 6328c54..1f4c47d 100644
--- a/VERSION
+++ b/VERSION
@@ -1 +1 @@
-7.17.0
+7.17.1
diff --git a/esmf_rules.mk b/esmf_rules.mk
index 29b827e..a5ce070 100644
--- a/esmf_rules.mk
+++ b/esmf_rules.mk
@@ -54,6 +54,14 @@ endif
     endif
   endif
 
+# ESMF using the NAG compiler has a bug with ESMF_TRACE_LIB_BUILD=ON
+# so we turn it off when using NAG
+# -----------------------------------------------------------------
+  ifeq ($(ESMF_COMPILER), nag)
+    ESMF_TRACE_LIB_BUILD=OFF
+    export ESMF_TRACE_LIB_BUILD
+  endif
+
 # ESMF with GCC 10.1 needs extra flags
 # ------------------------------------