Australia is facing a fresh trade dispute with the United States after being accused of failing to prevent goods linked to forced labour from entering global supply chains. The accusation has prompted a proposal for a new 12.5 per cent tariff on Australian exports, with the US targeting dozens of major trading partners including China, India, Japan and South Korea.
The Australian government has strongly rejected the claims, arguing that the country already has extensive safeguards in place to combat modern slavery and forced labour. Trade Minister Don Farrell said the proposed tariff was inconsistent with the free trade agreement between Australia and the United States.
Overnight, Farrell met with his US counterpart, Jamieson Greer, on the sidelines of an Organisation for Economic Co-operation and Development (OECD) meeting in Paris. 7News understands the Trade Minister reinforced Australia’s position that any tariffs are unjustified and that Australia has a robust legal framework and a world-leading approach to addressing modern slavery.
The proposed measures stem from a US Trade Representative investigation into trade practices across 60 countries. US Trade Representative Jamieson Greer said countries allowing goods made with forced labour to enter supply chains were creating an unfair disadvantage for American workers.
“The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable,” Greer said. “This creates a dynamic where American workers are forced to compete globally on an unlevel playing field.”
The report concluded all 60 countries examined had failed to sufficiently enforce bans on imports linked to forced labour.
Environment Minister Murray Watt told reporters at Parliament House in Canberra on Thursday morning that the Albanese Government thinks the Trump Administration is ‘completely unjustified’ in its actions. “We completely reject the suggestion that we don’t have strong enough safeguards against modern slavery, we have some of the world’s best legislation,” Senator Watt said. “Our Government has done a decent job of making sure we don’t get hit by some of these tariffs from the US and we will be fighting this one as well.”
The Coalition also said that the new tariffs are ‘incredibly disappointing’. Shadow Defence Minister James Paterson said, “it is not a friendly act from the Trump Administration”. “It is very difficult for them to justify this under our free trade agreement,” Paterson said.
The proposed 12.5 per cent tariff would replace the United States’ global 10 per cent Temporary Import Surcharge when it expires on July 24, 2026. If implemented, the new tariff could affect Australian exporters seeking access to the lucrative US market, although a number of products including pharmaceuticals, energy, rare earths and beef would be exempt under the current proposal.
The proposal will now undergo a public consultation process before any final decision is made.
