‘Unwarranted’: Trump proposes new 12.5 per cent tariff on Australia

The Trump administration has proposed a new 12.5 per cent tariff on Australia and a slew of other countries for allegedly failing to take action to prevent slavery, angering the federal government.

An investigation by United States Trade Representative Jamieson Greer found that Australia had “failed to impose and effectively enforce a forced labour import prohibition”.

The investigation found “the results of this investigation indicate that the acts, policies and practices of Australia related to the failure to impose and effectively enforce a forced labour import prohibition are unreasonable and burden or restrict US commerce”.

Fifty-four countries including China, Vietnam, Japan, the United Kingdom and New Zealand have been hit by the same 12.5 per cent tariff, with the investigation using similar language for dozens of countries.

A separate group of six economies – Canada, the European Union, Ecuador, Indonesia, Mexico and Pakistan – were hit with a lower 10 per cent tariff because the investigation found they were the only countries who had “not failed to impose a forced labour import prohibition”.

An existing 10 per cent tariff on all countries, including Australia, that was imposed by the Trump administration in February is due to expire in July.

Government sources were scrambling to understand the implications of the proposed new tariff, but said they believed it would not sit on top of the existing 10 per cent tariff. That means that, if imposed after a consultation period, Australian exports would move from a 10 per cent to 12.5 per cent tariff rate.

A spokesperson for Trade Minister Don Farrell said: “Australia maintains our position that any tariffs on Australian exports to the United States are unjustified and inconsistent with our free trade agreement.

“Australia has robust, comprehensive and world-leading legislation addressing forced labour and modern slavery.

“We continue to use every opportunity to advocate that US tariffs imposed on Australia are unwarranted.”

John Kunkel, a senior fellow at the University of Sydney’s United States Studies Centre, said: “Greer has clearly been tasked with restoring elements of the Trump tariff regime the Supreme Court knocked down in its ruling on his ‘liberation day’ tariffs. This looks like his attempt to put US tariffs on a more solid legal basis.”

Beef, a major Australian export to the US, would be exempt, as would other food items, metals and certain fuels and chemicals.

The US investigation found the countries including Australia were “subjecting US producers to unfair competition from