The United States will charge a 12.5 per cent tariff on Australian goods from today. Here’s why, and when they kick in.
US Trade Representative Jamieson Greer announced the “final action” this morning, at President Donald Trump’s direction. It concludes an investigation into around 60 different countries for their alleged importation (and thus their tacit support) for goods produced using forced labour, also known as “modern slavery”.
The Federal Register notice published today sets out the decision, saying that while some nations will skate with just a 10 per cent tariff, Australia and New Zealand are set to cop 12.5%.
US FTR Greer said:
“President Trump recognises that decades of moral suasion have not eradicated forced labor from global supply chains. The United States has had a forced labor import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same.”
When it starts
The tariff applies to goods entered for consumption, or withdrawn from a warehouse for consumption, from 12:01am US eastern time on 24 July 2026. That is 2:01pm AEST today.
There is a narrow grace period. Goods already loaded and in transit on their final mode of transport before that moment, and entered for consumption before 12:01am eastern time on 28 July, are not caught by the new rate.
Load those ships quickly, I guess.
Why Australia is on 12.5 per cent and not 10
The notice sets three tariff “bands”, rather than a single rate.
A 10 per cent rate applies to a named group of 17 economies: Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, the United Kingdom and Trinidad and Tobago.
A second band covers the European Union and Taiwan, where the Section 301 duty is set so the total including the existing most-favoured-nation tariff reaches 10 per cent, and Japan, Korea and Switzerland, where the same calculation caps the total at 12.5 per cent.
The third band is the default. For “goods of all other investigated economies,” the notice directs a rate of 12.5 per cent. That is the band Australia falls into.
The distinction is not arbitrary. USTR says the 10 per cent rate went to economies that either already impose a forced-labour import prohibition, or have committed to impose and enforce one through an Agreement on Reciprocal Trade. Australia is not among them.
What is exempt
Australian goods listed in Annex I and Annex II, Part A of the notice are excluded. The exemption categories cover raw materials where a tariff could leave US domestic supply unavailable, products that could cause economy-wide disruption, and products that cannot be grown or produced in sufficient quantities or at reasonable prices in the United States or sourced elsewhere.
A fourth exemption category applies to certain products of a named group of economies that USTR says it wants to encourage to adopt or enforce forced-labour import bans. Australia is not in that group.
Which Australian exports escape the tariff now turns on those annex listings, which exporters will need to check line by line against their own tariff codes. Best of luck, exporters.
