The United States has confirmed a 12.5% tariff on Australian exports, effective from 2:01pm AEST today, replacing the temporary 10% baseline levy that was due to expire at the same time.
The increase applies to Australia as one of 60 economies the US Trade Representative's office says failed to adequately enforce a ban on goods made with forced labour. In a statement today, US Trade Representative Jamieson Greer said decades of moral suasion have not eradicated forced labour from global supply chains.
Deputy Prime Minister Richard Marles rejected the US rationale today, arguing the increase "makes no sense" given Australia's existing modern slavery framework. Australia's submission to Washington had argued the country holds some of the strongest anti-forced-labour laws in the world, and questioned why comparable countries such as the UK were assessed at the lower 10 per cent rate. tradingeconomics
The new tariff does not stack on top of existing US measures on steel, aluminium and car parts, which sit under separate trade law provisions. Products already exempted under the outgoing 10 per cent surcharge, including many food categories, remain exempt under the new rate.
The product most directly relevant to a tariff increase like this is trade credit insurance, which responds to non-payment when a buyer defaults or becomes insolvent — not to the tariff cost itself. If the higher landed cost of Australian goods squeezes US buyer margins or demand, that's a receivables risk, not a cargo or business interruption one; standard cargo and BI wordings don't typically respond to a buyer simply failing to pay.
For brokers with clients selling into the US, the practical questions worth raising at the next renewal are: how concentrated is the client's US buyer book, does their trade credit program (if they have one) actually cover the buyers most exposed to the new rate and have logistics or customs delays changed enough to matter for cargo cover.
