Tariff Pressures Intensify for Australian Exporters
- Jess Dempster
- 8 minutes ago
- 3 min read
Australian exporters are facing fresh pressure in the United States market after a new 12.5% tariff came into effect this week, prompting strong criticism from agriculture and business groups.
The tariff replaces the previous 10% measure and applies across a broad range of Australian goods.
The US says the increase is linked to concerns over goods produced using forced labour entering supply chains, an argument Australian industry and government leaders have rejected, pointing to the country’s Modern Slavery Act and workplace laws as among the strongest labour protections in the world.
Agriculture warns of growing trade pressures
National Farmers’ Federation Chief Executive Michael Guerin said the decision is a major disappointment for Australian agriculture.
He said the additional 2.5% tariff creates further pressure for exporters already operating in a competitive global market, particularly as some other nations have received lower tariff rates.
“Rather than moving back towards the free and fair trading arrangements that have served both our countries well for two decades, the US has chosen to further increase barriers to trade, despite Australia’s longstanding record of high standards and responsible trade,” Mr Guerin said.
“Australian agriculture will continue working with government to protect access to key markets while building stronger trade relationships elsewhere.”
Mixed outcome for red meat exporters
Australian beef exporters have avoided the tariff increase, with beef remaining exempt under a zero per cent arrangement introduced late last year.
The exemption has been welcomed by the cattle industry, with the United States continuing to be Australia’s largest beef export market. It comes as US beef supplies remain tight, with America’s cattle herd at its lowest level in around 70 years following prolonged drought. The shortage has driven record prices and increased demand for Australian product.
Lamb and goatmeat exporters however have not fared as well, with both products now subject to the 12.5% tariff.
Meat & Livestock Australia says the change will create additional challenges for exporters and their customers, but the organisation will continue working with industry and government to maintain access and competitiveness in the US market.
Industry rejects labour claims
The Australian Meat Industry Council has also criticised the decision, arguing Australia already has strict workplace protections and compliance requirements.
It says the tariffs will increase costs for Australian exporters, as well as US importers, retailers and consumers.
“Australia has a robust, world-leading regulatory framework to address modern slavery and forced labour across supply chains. The Australian meat industry operates under stringent workplace and compliance requirements, providing confidence in the integrity of our production systems,” the AMIC said.
“Ultimately, the ongoing and increased tariff on protein imports will increase costs for American importers, retailers and consumers while also undermining a long-standing and mutually beneficial trading relationship between Australia and the United States."
Business groups have echoed those concerns, warning the move creates further uncertainty and undermines open trade principles.
Government vows to challenge decision
Federal Trade Minister Don Farrell has described the tariffs as unjustified and inconsistent with the Australia–United States Free Trade Agreement.
“Australia is a country that deals with the issue of modern slavery seriously,” Mr Farrell said.
"The tariff is unjustified and inconsistent with Australia’s free trade agreement with the US."
He says the government will continue engaging with US officials over the decision.
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