The US has proposed an additional 12.5% tariff on Australian goods, citing forced labour concerns. On top of the existing 10% baseline, Australian exporters are now facing a rapidly shifting trade environment.
The US Trade Representative, Jamieson Greer, listed Australia among 54 economies in a proposed action that would impose an additional 12.5% tariff on goods that have failed to enforce a prohibition on imports made with forced labour. A further six countries facing the same finding were listed at a lower proposed rate of 10%.
The proposal comes on top of a baseline 10% temporary import surcharge already applying to most Australian goods entering the US. That surcharge was introduced after the US Supreme Court struck down earlier reciprocal tariffs imposed under the International Emergency Economic Powers Act in February 2026.
Separate tariffs under Section 232 of the Trade Expansion Act also remain in place for specific goods. Steel, aluminium and copper products face tariffs ranging from 10% to 50%. Automobiles, trucks and truck parts face a 25% tariff. Certain advanced computing chips and products are subject to a 25% tariff. A 100% tariff on certain pharmaceuticals and pharmaceutical ingredients was announced on 2 April 2026, with exemptions applying to many products.
The forced labour angle
The basis for the proposed 12.5% tariff is an investigation under section 301 of the Trade Act 1974 into whether Australia and other economies have failed to impose and effectively enforce a ban on importing goods produced with forced labour. The investigation covers 60 economies in total.
Key Australian exports including beef, energy, pharmaceuticals and rare earths are expected to be exempt from the proposed tariff. However, Australian businesses whose goods are manufactured in whole or in part overseas should be aware that higher tariffs imposed on other countries may also affect the tariff rates applicable to their products entering the US market, according to advice from the Australian Government.
The de minimis exemption for low-value imports, which had allowed goods valued at US$800 or less to enter the US without tariffs, was suspended from 29 August 2025 and that suspension was confirmed as an extension on 20 February 2026. All goods at or below that value are now subject to specific tariff rates.
Prime Minister Anthony Albanese and Trade Minister Don Farrell have formally described the proposed 12.5% tariff as unjustified and inconsistent with the Australia-United States Free Trade Agreement. Under that agreement, the US currently pays no tariffs on its exports to Australia.
The proposed tariffs will go through a public consultation process before any potential implementation, with hearings scheduled for 7 July 2026. The Australian Government has said it continues to advocate for open trade and is working to analyse the impacts of the US trade measures on Australian exporters.
What exporters need to know
Australian exporters are encouraged to stay up to date with new announcements and to seek independent advice, including from licensed customs brokers or directly from US Customs and Border Protection. The Australian Trade and Investment Commission provides targeted information and advice through its Go Global Toolkit, which includes webinar recordings explaining the tariff changes.
The Australian Government’s Department of Foreign Affairs and Trade is publishing updates on the latest US tariff measures at dfat.gov.au, and the US Federal Register and US Customs Systems Management Service are the primary sources for new notices on the application of tariffs to specific goods.
The July hearings represent an opportunity for affected businesses and industry groups to make submissions before any new tariff is formalised.
