Trump hits Australia with 12.5% tariff as 60 US trading partners face new levies
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The news: The Trump administration will impose a 12.5% on Australian exports from 12:01am Friday (ET), after announcing new levies on imports from 60 trading partners over allegations of lax enforcement of forced labour bans. The measures comes as temporary 10% global tariff expires.
The context: The administration said the US has the world’s strongest import bans on goods produced with forced labour and enforces them more rigorously than any other country, giving foreign exporters an unfair competitive advantage.
The move follows a February US Supreme Court ruling that struck down Trump’s “reciprocal” tariffs between 10% to 50%, which were introduced last year under national emergency powers to reduce the US trade deficit.
A senior Trump administration official rejected suggestions that the new forced labour tariffs were simply a replacement for the expiring reciprocal duties, despite the timing, according to Reuters.
The administration said several categories of goods will be exempted, including oil and gas, fertiliser, certain food products, and goods already subject to Section 232 national security tariffs, such as autos, steel, aluminium and copper. Goods that comply with the US-Mexico-Canada Agreement will also be excluded.
Earlier this month, Australia formally opposed the proposed tariffs, arguing it has some of the world’s strongest laws to tackle forced labour, according to the ABC.
What they said: Trade Minister Don Farrell said, at the ALP national conference in Adelaide, that “it was a small paradox that Australian exports to the US had actually increased 67% since so-called Liberation Day”, with total trade reaching a historic high of $1.32 trillion last year.
Farrell added that Australia’s comparative advantage remained unchanged “because the 60 other nations our exporters compete with were also hit with the tariff increase”.
“We believe that, among all countries in the world, Australia does take the issue of modern slavery seriously, and we’ll continue to do that,” Farrell said.
“The Albanese government believes that this imposition of higher tariffs on trade is completely unjustified and we will continue to lobby the United States trade representative to remove all tariffs on trade,” he added.
