Wine, food, cosmetics and sustainable clothing will be among the Australian products hardest hit by Australia Post’s decision to stop parcel shipments to the US.
Australia Post is suspending parcel services to the US in response to the Trump administration’s tariffs.
The government-owned agency announced the huge shift on Tuesday morning, in line with many other countries’ state-owned carriers.
Monash Business School senior lecturer Nicola Charwat said “distinctly Australian goods” would be affected the most.
“The impact in Australia will primarily be felt by small businesses that sell directly to American consumers,” Dr Charwat said.
“This includes businesses specialising in sustainable clothing and gifts as well as distinctly Australian goods such as cosmetics, food and wine. These parcels will now be subject to a 10 per cent baseline tariff.”
The tariff had a geopolitical sheen and could cause domestic headaches for the President, Dr Charwat said.
“The real target appears to be major overseas retailers like Shein and Temu that also export directly to consumers and avoid much higher baseline tariffs of 25 per cent or more that apply to Chinese imports.”
Australia Post has partially suspended services to the US ‘until further notice’.
“American consumers are the real losers, facing either restricted access to overseas goods from online businesses or substantially higher prices to cover the tariffs.
“This is unlikely to play well to American voters who may also find that parcels from friends and family overseas will be impacted.”
Issuing notice of the suspension on Tuesday, Australia Post canned the delivery of parcels effectively immediately.
“As a result of recently announced changes to import tariffs for postal items sent to the US and Puerto Rico, Australia Post will temporarily partially suspend postal services to the United States and Puerto Rico, effective 26 August, 2025 until further notice,” the notice says.
“This response is in line with action taken by numerous postal operators internationally.”
Australia Post parcel and post executive Gary Starr said US Customs and Border Protection had only just alerted postal agencies to the change.
“Australia Post is focused on providing a reliable and competitive postal service for customers sending parcels internationally,” Mr Starr said.
“Guidance from CBP has only recently been issued and, like more than 190 other postal providers, we’ve been working at pace to find a solution.
The White House says scrapping the $US800 tariff-free threshold would curb the supply of illicit drugs. Picture: NewsWire / Jim Watson / POOL / AFP
“We are disappointed we have had to take this action; however, due to the complex and rapidly evolving situation, a temporary partial suspension has been necessary to allow us to develop and implement a workable solution for our customers.
“Australia Post continues to work with US and Australian authorities and international postal partners to resume postal service to the US as a priority.”
The national postal services of New Zealand, Belgium, Britain, Denmark, France and India have made the same service suspensions.
The US government is requiring prepayment of tariffs prior to an item’s arrival and has scrapped the tariff exemption on inbound goods under $US800 ($A1230).
According to data from US Customs and Border Patrol, 1.36 billion packages were sent to the US in 2024 under this exemption.
An Australian government spokesperson said: “The United States’ decision to remove exemptions from tariffs and duties for low value imports is disappointing and will only drive up costs for American families and small businesses.
The change, effective immediately, affects business customers. Picture: NewsWire / Gaye Gerard
“The Albanese government will work with Australia Post to limit disruption for affected customers while they make adjustments to comply with new requirements.
“We continue to advocate for the removal of all tariffs on Australian exports, in line with our free trade agreement.”
The Australia Post alert was issued on Tuesday and is effective immediately.
“Postal goods sent to the US and Puerto Rico lodged on or after 26 August 2025 will not be accepted by Australia Post until further notice,” the alert said.
The parcel suspension applies to Business Contract, MyPost Business and retail customers.
Gifts under $US100 ($A154), letters and documents are unaffected by the change.
“Australia Post is working with Zonos, an authorised US Customs and Border Protection (CBP) third-party provider, to offer a solution that will, once launched, allow services to resume for Business Contract and My Post Business customers,” the notice reads.
Zonos is one of two companies approved by the White House to pay the US tariffs on behalf of international mail carriers. Zonos founder Clint Reid has been posting exuberant messages on X for weeks.
“I can’t begin to explain the absolutely utterly insane month we are having at Zonos,” he posted on August 22.
“The Postal (sic) world has been turn upside down as it is required for them to collect duties on all shipments before shipping to the United States. Over the coming days and weeks, there will be some very exciting news.”
FedEx is not affected by US tariffs because the company is an express international carrier, not a postal operator.
“FedEx continues to accept and transport US-bound shipments from Australia,” regional vice-president Peter Langley said.
Opposition small business spokesman Tim Wilson said Australia Post’s suspension was “very concerning”.
“A lot of small businesses depend on Australia Post to ship small goods internationally,” he told Sky News.
Opposition small business spokesman Tim Wilson says Australian small businesses will be most affected. Picture: NewsWire / Martin Ollman
“Small businesses are going to be the ones most impacted by this decision.”
Mr Wilson put the onus on the government and diplomatic corps to try and find a solution.
“We need government to engage. I suspect (US ambassador) Kevin Rudd is going to be off to the White House or Congress pretty quick smart, because we need to make sure this relationship is sorted.”
“The last time the Albanese government said they had a relationship with another country sorted, it was Israel, and we’ve seen where that’s gone.”
On July 31, President Donald Trump issued an executive order confirming Australian goods into the US would be subject to a 10 per cent tariff.
This 10 per cent levy is under Trump’s “reciprocal tariffs” umbrella, despite Australia and the US having a free-trade agreement.
The 10 per cent duty is separate to the industry-specific, 50 per cent Trump administration tariffs on Australian steel, aluminium and copper imports – these levies remain.
Announced on July 30, President Trump’s executive order says ending the under-$US800 “de minimis” exemption would shield the US public from drugs.
“ … closing the catastrophic loophole used to, among other things, evade tariffs and funnel deadly synthetic opioids as well as other unsafe or below-market products,” a White House statement reads.
“The de minimis exemption has been abused, with shippers sending illicit fentanyl and other synthetic opioids, precursors, and paraphernalia into the United States in reliance on the lower security measures applied to de minimis shipments, killing Americans.”
The President’s One Big Beautiful Bill Act repealed the legal basis of the de minimis exemption.
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