Australia faces proposed 12.5pc US tariff over forced labour crackdown

The US proposal came ahead of the July 24 expiry of a temporary 10 per cent tariff imposed by the Trump administration. (Reuters: Carlos Barria)

Australia could face a new 12.5 per cent US tariff under a Trump administration proposal targeting countries accused of failing to stop imports linked to forced labour.

The Australian government says any tariffs on its exports are "unjustified" and inconsistent with the free trade agreement, adding it has world-leading laws to combat forced labour.

The tariffs would not take effect immediately. The proposal will undergo a public consultation process, with hearings due to begin on July 7.

Australia could be hit with a new 12.5 per cent US tariff after the Trump administration accused dozens of countries of failing to crack down on goods made with forced labour.

The proposed tariff was announced by the US Trade Representative (USTR) on Wednesday, as part of an investigation into what Washington says are unfair trade practices by 60 countries.

Australia is among 45 countries facing the higher 12.5 per cent rate, alongside China, Japan, India, South Korea, Brazil and Switzerland.

Another group, including Canada, Britain, the European Union and Mexico, would face a lower 10 per cent duty.

Australia has pushed back on the Trump administration proposal. (Reuters: Elizabeth Frantz )

US Trade Representative Jamieson Greer said the US would "no longer tolerate" countries that failed to address forced labour in their supply chains.

"The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable," Mr Greer said.

The USTR also proposed a textile mechanism that would allow for a certain volume of clothing and textile imports to enter the US at a reduced tariff rate, although details have not yet been released.

A spokesperson for the Trade Minister said Australia maintained that any tariffs on Australian exports to the US were "unjustified" and inconsistent with the Australia-US Free Trade Agreement.

The spokesperson said Australia had "robust, comprehensive and world-leading legislation" addressing forced labour and modern slavery, and would continue to advocate that US tariffs imposed on Australia were "unwarranted".

The proposed tariffs would not take effect immediately. The proposal will undergo a public consultation process, with hearings due to begin on July 7.

The US proposal came ahead of the July 24 expiry of a temporary 10 per cent tariff imposed by the Trump administration after the US Supreme Court struck down a separate set of tariffs in