Australian exports to the US now face a 12.5% tariff, confirmed by the Trump administration on Friday for 60 trading partners. It replaces a temporary 10% levy that expired the same day. The increase came via a fresh legal mechanism, a US investigation into which trading partners aren't doing enough to stop forced labour in their supply chains. The administration says the findings justify higher tariffs on the countries it accuses of falling short. Australia landed in the higher 12.5% band alongside Japan, South Korea and China, while countries like the UK and Canada were assessed at 10%.
The new mechanism is important here. Back in February, the US Supreme Court struck down many of Trump's earlier tariffs, forcing the administration to find a new legal basis to keep them in place. Australia's case for an exemption looks reasonably strong on paper. The country has consistently earned the US's top rating on its own trafficking report, and the government argues its modern slavery laws are already stronger than most of the countries facing the lower 10% rate. However, the US hasn't budged yet.
For Australian exporters, the immediate damage is limited. Beef, gold and copper, the three biggest exports to the US, remain tariff-free, and Australia's exporters still benefit from the Australia-United States Free Trade Agreement, under which the US pays no tariffs on Australian goods heading the other way. This isn't about the tariff rate. It's a reminder that Australia's access to its biggest trading partner now runs on shifting legal workarounds, not settled policy.
Prime Minister Anthony Albanese says he'll raise the issue directly with Trump, though it's far from clear that will land any better than Australia's written submission did.
