US President Donald Trump has officially slapped a new 12.5 per cent tariff on Australian exports that will come into effect on Friday.
The new 12.5 per cent tariff, first flagged in June, will replace the existing 10 per cent tariff that expires in July.
The US Trade Representative (USTR) confirmed the tariff will take effect from midnight in the US and 2.01pm Friday AEST in Australia.
Australia has slammed the tariff as “unjustified”.
Trade Minister Don Farrell was the first to react to the news on Friday, insisting there was simply no merit to the US’ claimed reasons for the new impost.
“These tariffs are unjustified, inconsistent with our free trade agreement, and should be removed,’’ he said in a statement.
Donald Trump’s new tariff takes effect in Australia on Friday afternoon. Picture: Burak Kara/Getty Images
“Australia’s measures to combat forced labour and modern slavery are among the strongest in the world, and we are recognised globally, including in the US, for our leadership.”
The US is now raising a new reason for the impost, claiming it relates to forced labour.
It follows a US Supreme Court ruling that President Donald Trump’s original 10 per cent “reciprocal tariffs” were unlawful.
“Today’s action will begin to correct what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere,” US trade representative Jamieson Greer said in a statement.
“I am encouraged by the trading partners who have moved quickly to adopt forced labor import prohibitions, and look forward to ensuring their effective enforcement.”
US importers and consumers pay the tariffs increasing the cost of imports. It is estimated that the Trump tariffs amount to an average tax increase of $1000 per US household.
Anthony Albanese says the tariff is ‘unjustified’. Picture: NewsWire / George Chan
Anthony Albanese criticised US President Donald Trump’s new tariff as “unjustified,” admitting in June there was no warning of the latest tariff hike.
“Any tariff on Australian exports to the United States are unjustified, inconsistent with our free trade agreement,’’ Mr Albanese said.
“With regard to the specifics that have been put forward by their trade representative, Australia has robust, comprehensive, and world-leading legislation addressing forced labour and modern slavery.
“It’s one for which no notice was given, and one of the things we asked for in international engagement, of course, is certainty,” he said.
“Importantly, this isn’t Australia being singled out. Many countries — 54, in fact — have been subject to this latest move.
“We actually think it’s not only against the interests of the United States, but importantly, it undermines the global trading system”.
Australia’s former ambassador to the US, Joe Hockey. Picture: NewsWire / Martin Ollman
The US named Australia, along with 60 countries, over alleged failures to stop importing goods made with forced labour and asked for submissions on the proposal.
Former US ambassador Joe Hockey revealed in June that he had personally argued with the US President over his embrace of tariffs but said the new hike was “no surprise at all.”
“The President of the United States is absolutely convinced the tariffs are great,’’ Mr Hockey said,
“I’ve argued personally with him on the issue, and he’s just not for moving.
“He just can’t see the inflationary impact and the negative impact on American consumers, and it just goes to show how the world’s on its head when a left-wing Labor Prime Minister is trying to convince a right-wing Republican president that free trade is actually the right way to go.”
Asked if these proposed tariffs would become a reality, Mr Hockey said he thought it highly likely.
“America is running out of money, and they need to get it from somewhere,’’ he said.
“And the President of the United States is convinced that foreigners pay tariffs imposed by America, whereas in fact it is American consumers that pay higher prices, and I just don’t understand where the world is heading here in the United States and elsewhere, where people think it’s a great idea to increase taxes on consumers and think that it’s going to improve the economy and create more jobs.”
Trade minister Don Farrell says tariffs on Australian exports to US are ‘unjustified and inconsistent with our free trade agreement’. Picture: NewsWire / Martin Ollman
In March the US Trade Representative initiated 60 investigations related to the alleged failure of various economies to impose and effectively enforce a prohibition on the importation of goods produced with forced labour.
“The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable,’’ said Ambassador Jamieson Greer.
“This creates a dynamic where American workers are forced to compete globally on an unlevel playing field … we will no longer tolerate this disparity.
“Some trading partners have taken initial steps to prevent the importation of forced labour goods, including through USMCA and commitments in Agreements on Reciprocal Trade.
“However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labour globally.”
Under the existing tariff regime, the US will raise an estimated $956 billion in revenue from 2026-2035.
The announcement was accompanied by a report that outlined the following reasons for the change in a short paragraph on Australia.
“USTR found that Australia has failed to impose and effectively enforce a forced labour import prohibition,” the report stated.
“In section IV, we found that the failure to impose and effectively enforce a forced labour import prohibition is unreasonable. In section V, we found that the failure to impose and effectively enforce a forced labour import prohibition burdens or restricts US commerce.
“For the foregoing reasons, the results of this investigation indicate that the acts, policies and practices of Australia related to the failure to impose and effectively enforce a forced labour import prohibition are unreasonable and burden or restrict US commerce.”
In a statement, Trade Minister Don Farrell said that Australia “maintains our position that any tariffs on Australian exports to the United States are unjustified and inconsistent with our free trade agreement.”
“Australia has robust, comprehensive and world leading legislation addressing forced labour and modern slavery,” he said.
