US Tariffs on Australian Goods: How It Affects Australian Exports & What to Do

The recent implementation of new tariffs by the United States presents a significant shift in the global trade landscape, directly impacting Australian businesses exporting to the US market. Understanding these changes, the affected sectors, and the available resources is crucial for navigating this evolving situation.

What’s Changed? The New US Tariff Landscape

As of April 15, 2025, the United States has imposed a 10% baseline tariff on most imported goods, including those from Australia. This measure stems from a US executive order citing objectives such as rectifying trade imbalances, boosting domestic industry, and safeguarding national security under the International Emergency Economic Powers Act (IEEPA).

It’s important to note:

These tariffs are taxes paid by the US importer to US customs authorities.
The tariffs apply only to goods, not services.
The Australian government views these tariffs as unnecessary and unwarranted and does not intend to impose retaliatory tariffs, believing they would harm Australian consumers and businesses.
The baseline tariff for most nations is set at 10%. On April 9, 2025, the U.S. administration announced a 90-day pause on implementing higher “reciprocal” tariffs for most countries, except China, which faces a total tariff of 145% on its goods.
There is currently no end date specified for these tariffs. The situation is evolving.

Exemptions for Australian Goods

Australia–United States Free Trade Agreement (AUSFTA): Under the AUSFTA, which came into effect in 2005, over 97% of Australian non-agricultural exports to the U.S. became duty-free, and two-thirds of agricultural tariff lines were eliminated. This agreement continues to provide tariff-free access for many Australian goods, including certain agricultural products.
Existing U.S. Tariffs: Goods already subject to higher tariffs under U.S. law are exempt from the new 10% baseline tariff. This includes:
- Steel and aluminum products, which are subject to a 25% tariff under Section 232 of the Trade Expansion Act.
- Automotive vehicles and parts, also under Section 232 tariffs.
- Timber and lumber articles, copper products, certain critical minerals, and select pharmaceutical products, which are under investigation for possible tariffs under Section 232.
Energy Products and Certain Minerals: Energy products and minerals not available in the U.S. are exempt from the 10% baseline tariff.
Semiconductors: On April 11, 2025, the White House clarified the exceptions for semiconductors.

Tariffs Timeline: A Breakdown of Changes in 2025

The tariffs of the Trump administration have shifted constantly over the last several weeks.

January 20th
Trump immediately announces plans to impose a 25% tariff on imports from Canada and Mexico starting February 1st.

February 1st
An executive order is signed to impose a 25% tariff on goods imported from Canada and Mexico as well as a newly announced 10% tariff on goods from China starting February 4th. Canada, Mexico, and China announce they are prepared to respond with tariffs and countermeasures.

February 3rd
A 30-day pause on tariffs is agreed upon after talks with Mexico and Canada. Trump proposes tariffs against the European Union.

February 4th
The 10% tariffs toward China go into effect. In response, China imposes tariffs on good imported from America.

February 7th
Trump announces that more “retaliatory” tariffs are being planned for other countries. It is not specified countries would be affected.

February 10th
The 25% tariff on steel and steel derivative articles is extended to all countries. A previous 10% tariff on aluminum and aluminum derivative articles is increased to 25% and extended to all countries.

February 13th
Trump announces a broad plan for “reciprocal” tariffs on America’s trading partners. It is described as a larger plan to bring manufacturing back to America.

February 14th
A non-specific tariff on automobiles and auto parts is announced.

February 25th
Commerce Secretary Howard Lutnick is ordered to investigate whether a tariff on imported copper is required to protect national security.

March 1st
A similar executive order is issued to Lutnick requesting he investigate whether imported lumber poses a national security risk.

March 4th
The 25% tariffs on goods from Mexico and Canada go into effect. China’s 10% tariff is doubled to 20% and goes into effect. Canada responds with a 25% tariff on over $100 billion of American goods.

March 5th
Trump grants a one-month exemption on tariffs from Canada and Mexico for U.S. automakers after speaking with the “Big 3”.

March 6th
Trump postpones many of the tariffs on goods from Mexico and Canada. He advises that “Reciprocal” tariffs are still on track for April 2nd.

March 10th
China’s 15% retaliatory tariff on farm products from America (chicken, pork, soybeans, and beef) takes effect.

March 12th
The 25% tariff on steel and aluminum products and derivatives takes effect.

March 13th
Trump proposes a 200% tariff on European Wine, Champagne, and spirits in response to a previously proposed 50% tariff on whiskey by the European Union.

March 26th
Trump proposes a 25% tariff on all cars and car parts imported into the U.S.

April 2nd
At a Rose Garden event Trump unveils a baseline 10% tariff across all countries, plus dozens of country specific tariffs. China has an additional 34% tariff rate imposed on top of the previously imposed 20% rate.

April 3rd
Auto tariffs begin.

April 4th
China announces a plan to introduce 34% tariff on all U.S imports beginning April 10th, matching tariffs imposed by Trump.

April 5th
The baseline 10% tariffs go into effect.

April 7th
Trump threatens an additional 50% tariff rate on goods imported from China.

April 9th
The country specific reciprocal tariffs go into effect. Later, a 90 day pause on all country specific reciprocal tariffs is announced. The baseline 10% rate still applies to all countries. China is the one exception and instead has its tariff rate increased to 125%.

April 10th
Trump Pauses Country Specific Reciprocal Tariffs. In lieu of applying country-specific reciprocal tariffs, President Trump established a standard 10% reciprocal tariff rate for all countries, with the exception of China. In response to China’s retaliatory actions—such as raising tariffs on U.S. goods—the reciprocal tariff on Chinese-origin goods was set at 125%, replacing (not adding to) the global 10% rate.

Which Australian Exports Are Most Affected?

While the 10% baseline applies broadly, some sectors face different tariffs or specific challenges:

Agriculture

This sector, a major exporter to the US ($8.2 billion in 2024), faces significant headwinds.

Red Meat: As the largest market for Australian red meat ($6.4 billion in 2024), the imposition of tariffs will impact competitiveness. While the initial information mentioned a 10% tariff, it’s important to note that specific tariff rates might vary based on the type of red meat. This will make Australian beef and sheep meat less competitive against suppliers like Canada and Mexico, who are exempt under the USMCA agreement. Trade diversion to other markets (e.g., China, Japan, South Korea) is anticipated, though increased competition in those markets may also occur.

Wine: Exports face a baseline tariff. While the previous information indicated a 10% baseline tariff, the exact rate might be subject to further adjustments or specific product classifications. Notably, wine in Australian aluminum cans is expected to face the baseline tariff applicable to wine, not the potentially higher Section 232 aluminum tariff.

Other: Wheat, forestry products, and cotton are also notable exports, and the initial 10% baseline tariff would apply to these unless specified otherwise in subsequent adjustments. Cotton could still face indirect challenges if tariffs on goods using Australian cotton, like Vietnamese T-shirts, lead to a decrease in US demand for those finished products.

Manufacturing (Steel & Aluminum)

Products subject to existing US Section 232 measures face specific tariffs.

Steel: While the initial information stated a 25% tariff, the recent proclamations indicate adjustments to existing Section 232 measures on steel. Proclamation 10896 of February 10, 2025, adjusted these measures. The tariff rates and potential exemptions may vary based on the specific type of steel product and its origin. For instance, there have been specific adjustments and melt and pour requirements implemented for steel imports from countries like Mexico.

Aluminum: As of March 12, 2025, all imports of aluminum articles and derivative aluminum articles from Australia became subject to the additional ad valorem tariff proclaimed in Proclamation 9704, as amended. Initially set at 10%, it’s crucial to monitor any further adjustments to this rate. The origin of components remains a critical factor; if materials are sourced from countries with higher tariffs (like China) and not substantially transformed in Australia, the final product entering the US could face a combination of duties.

Automotive

Vehicles and parts are subject to specific Section 232 tariffs.

According to Proclamation 9888 of May 17, 2019, automobiles and certain automobile parts are subject to a 25% ad valorem tariff. This tariff remains in effect and exempts these products from the general 10% baseline tariff. For automobiles that qualify for preferential tariff treatment under the USMCA, there’s a provision where the 25% tariff may exclusively apply to the value of the non-U.S. content, provided importers submit the necessary documentation detailing U.S. content. The tariff on parts took effect around May 3, 2025, as previously noted.

E-commerce/Complex Supply Chains

The origin of the goods is the primary determinant for tariff application.

For goods with complex supply chains, the tariff applied is based on where the product originates. As highlighted previously, a T-shirt designed in Australia but manufactured in Vietnam using Vietnamese cotton and shipped directly to the US would likely be subject to the US tariff rate applicable to goods from Vietnam. Understanding the specific rules of origin for different product types and the countries involved in the supply chain is essential for determining the applicable tariff.

Understanding The Basics & Preparing Your Business

Here are answers to some common questions about tariffs and how to prepare:

What is a tariff?

A tariff (also known as an import duty or customs duty) is a tax imposed by a country on imported products. This increases the cost of imports compared to domestic products. Tariffs are typically collected by an importing country’s customs authority when products cross borders.

Who pays a tariff?

Importers (buyers) in the US are generally responsible for paying the tariffs when products are imported. However, specific responsibility depends on the Incoterms® agreed upon in the contract between the exporter and importer.

What are Incoterms®?

Incoterms®, or International Commercial Terms, are a set of globally recognised international trade rules for the sale of products. Each Incoterms® rule has its own set of terms outlining the steps of international trade transactions and defining the point where costs and risks transfer from the seller to the buyer. Some of the most common Incoterms used by Australian exporters include:

EXW (Ex Works): This term places the minimum obligation on the exporter, with the buyer taking full responsibility for the carriage of goods from the seller’s premises.
FOB (Free on Board): The seller is considered to have delivered the goods once they pass the ship’s rail at the port of shipment.
CIF (Cost, Insurance and Freight): The seller covers the cost, insurance, and freight to bring the goods to the port of destination.
CIP (Carriage and Insurance Paid To): The seller pays for carriage and insurance to the named place of destination.

There are a total of 11 Inco t erms currently in use.

How long will these tariffs be in place?

There is currently no end date specified for these tariffs. The situation is evolving.

I export to the US. What can I do to prepare my business for US tariffs?

Get on the front foot with a plan. Plan for worst-case scenarios early. You don’t need to act on the plan immediately, but having contingencies in place is crucial for navigating uncertainty.

Consult with customs brokers, freight forwarders, and banks: These experts can provide specific guidance on tariff classifications, potential costs, and logistical adjustments. ICE have a team of highly experienced in-house customs brokers available to consult on your specific goods.

Potentially set up US bank accounts or accounts with US Customs and Border Protection: This may be necessary as payment terms adjust due to tariffs and associated costs.

Start shifting your marketing messages. In challenging economic times, people are more motivated by avoiding loss than capturing opportunity. Clearly explain the benefits of your offer now, focusing step-by-step on the value you provide. Use visuals to reinforce your message where possible.

Review supply chains to minimise tariff impacts where possible: Explore alternative sourcing or manufacturing locations if tariffs significantly impact your current costs.

Look at your pricing. Instead of immediately dropping prices, consider creating a higher-priced, value-added option. This strategy can help maintain profitability and provide a more robust financial position.

Boost domestic sales or diversify into other export markets: Reducing reliance on a single market can mitigate the risks associated with international trade policy changes. Consider potentially leveraging Australia’s FTAs (e.g., UK, UAE, India, China, etc).

Remind prospects you exist… often. In a market where attention is divided, consistent communication is key. Maintain a regular presence on social media and actively engage your email list. Position your business as a Key Person of Influence within your industry.

BONUS: If your business has significant cash reserves, consider exploring opportunities to invest in assets like pensions while markets experience downturns. Remember, your business operates as a micro-economy. Maintaining strong customer relationships and ensuring you remain oversubscribed is vital for sustained profitability, regardless of the broader macroeconomic environment.

Need help navigating these new US tariffs?

At ICE, our expert customs brokers and logistics specialists are here to help you understand your obligations, minimise costs, and keep your goods moving. Whether you’re reviewing your supply chain or updating your tariff strategy, we’ve got the experience to support your next steps.

Get in touch today to schedule a consultation and ensure your business stays ahead in a changing trade landscape: 1300 227 461