Why is the US government imposing new tariffs on Australia?

The US is penalising Australia after an audit by the Office of the United States Trade Representative concluded that the country failed to adequately enforce bans on forced labour imports.

How high are the new US tariffs on Australian exports, and who else faces them?

Australia faces a 12.5% tariff rate, placing it in the highest penalty bracket alongside 44 other nations, including China and India. A separate group of countries, including Canada, Mexico, Indonesia, Pakistan, and the European Union, face a lower 10% tariff due to less severe enforcement failures.

Why did Australia get hit with higher US tariffs than Canada or the EU?

The US Trade Representative grouped Australia into the higher 12.5% tariff bracket because of the specific findings regarding its supply chain enforcement failures. While Canada and the EU faced a lower 10% tariff for partial enforcement gaps, Australia's existing legal frameworks were judged to have failed more comprehensively to block forced labour imports.

What is the macro context behind these new US trade penalties?

These penalties are the first major trade interventions from Washington since the US Supreme Court ruled President Trump's broad 2025 "Liberation Day" tariffs unlawful.

How does this US tariff decision affect Australia’s Modern Slavery Act?

The US findings directly challenge the perceived effectiveness of Australia's Modern Slavery Act, which was implemented in 2018. Despite having dedicated domestic legislation, the US audit reveals that Australia's practical enforcement and legal prohibitions against importing goods produced via forced labour are seen as insufficient by international standards.

Image for illustrative purposes only. Not a real photo.

US slaps Australia with forced labour tariffs

Written by Heidi Cuthbert Published Jun. 3 2026Last Updated Jun. 3 2026

Australia is among 45 nations facing new 12.5% US government tariffs following an investigation into global forced labour enforcement.

The Office of the United States Trade Representative launched the probe, auditing 60 trading partners to evaluate their legal frameworks and compliance mechanisms regarding forced labour import bans.

The investigation concluded that 54 of these nations failed to establish or effectively enforce comprehensive legal prohibitions against importing goods produced wholly or partly through forced labour.

While a subset of countries — including Canada, Mexico, Pakistan, Indonesia, and the European Union — will see 10% tariffs imposed due to specific enforcement failures, Australia has been grouped with jurisdictions like China and India under the higher 12.5% tariff bracket.

The trade policy marks a shift in Washington's strategy to combat modern slavery within global supply chains whilst simultaneously testing international trade relations.

For Australia, which implemented its own Modern Slavery Act in 2018, the US findings challenge the perceived robustness of local supply chain regulations and threaten key export sectors.

The introduction of the targeted penalties comes at a tumultuous time for international commerce.

They represent the first major trade interventions announced by Washington since the US Supreme Court struck down President Trump’s sweeping 2025 "Liberation Day" tariffs, ruling them unlawful.

By shifting the legal justification from broad national security measures to specific humanitarian and labour standards compliance, the US administration appears to be navigating around domestic judicial roadblocks to continue its protectionist economic agenda.