Australian businesses found a workaround for US import duties. It’s saving them thousands. Here’s how
For Australian businesses selling into the US, it’s been quite the year. April 2 will mark the first anniversary of Liberation Day, the date on which US President Donald Trump unveiled his second administration’s plans to regulate imports by imposing a suite of duties on almost every country in the world.
Effective April 5, 2025, the President’s Executive Order 14257 put a 10 per cent baseline tariff on almost all goods and services entering the country. Hot on its heels came country and category specific rates, some of them subject to rapid fire changes, as deals were made and re-made.
August 29 brought the scrapping of the long standing de minimis exemption which enabled sellers to avoid paying duty on shipments valued at less than $US800. This move was designed to slow the flow of packages into the country, thereby giving the US Customs and Border Protection Service greater capacity to detect illicit and contraband substances and goods.
Confusion and consternation were common responses to these developments in the first instance, with exporters around the globe scrambling to determine what an altered US playing field would mean for their operations and bottom line.
Scores of Australian enterprises were among them, including many which had built lucrative revenue streams sending their wares across the Pacific.
According to a new cross-border complexity report from Avalara, 83% of businesses believe that cross-border operations have become more complex and harder to manage compared with just 12 months ago.
Turning adversity into opportunity
But Australian businesses and business owners are a resourceful and resilient bunch. The past year has seen them respond smartly and swiftly to changed trading conditions.
Take ShowPo, for example. The online retailer did its sums and ascertained that establishing a US fulfilment centre would mean paying the 10 per cent tariff on the cost price of its goods when they entered the US, rather than on the sums for which they would subsequently be sold to customers.
By June 2025, its Texas warehouse was open for business and offering same day delivery on some orders – a point in its favour, given US consumers’ high expectations regarding speed and responsiveness of service.
Other Aussie rag traders have taken a similar tack. ShowPo’s fast fashion archrival White Fox and activewear upstart LSKD both managed to get US warehouses up and running within months of the Liberation Day proclamations and they’re enjoying the benefits of increased agility and a lower import tax impost as a result.
Investing in sales tax technology that supports change and growth
Responding to unexpected developments in the international trade landscape, as these Australian businesses have done over the past 12 months, doesn’t have to entail hundreds of hours of hard work and hassle for logistics and compliance personnel.
That’s provided they’re set up to be nimble and adaptable, with automated tax compliance technology. It’s designed to simplify the business of selling into the US and other countries by streamlining and automating all the tasks associated with international tax compliance. These include registration, licensing, calculation, document management, reporting and e-invoicing.
When this software is up and running in the back office, businesses can calculate a wide range of indirect taxes in real time, including US import duties, aka tariffs, and any applicable sales taxes at the time an order is placed.
If you select a solution from a vendor that invests in staying up to date with regulatory changes around the globe, you can take comfort in the fact you’re getting those numbers right, regardless of how thick and fast changes may come.
You’ll also be in possession of an invaluable planning aid; one which can be used to inform strategic financial decisions, such as whether to shift your warehousing and logistics offshore or continue to ship to overseas customers direct from Australia.
Ensuring your export business is ready for anything in 2026 and beyond
Tariff turmoil of the past 12 months notwithstanding, the US remains an extraordinarily attractive market for Australia businesses seeking profitable growth.
Deploying automated tax compliance technology will allow your business to trade on with confidence, as ahead-of-the-curve local operators have succeeded in doing, despite the uncertainty engendered by sudden regulatory changes.
If you’re committed to achieving long term export success to the world’s largest economy, it’s an essential investment that will pay for itself many times over.
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