Australia Tariff Laws 2025: Complete Guide to New Trade Policies & Market Impacts

Published January 2025 • 15 min read

The global trade landscape has shifted dramatically for Australian businesses in 2025. New tariff policies, particularly from the United States, have created both challenges and opportunities for exporters across multiple sectors. Whether you're exporting beef to America, importing steel for manufacturing, or running an e-commerce business shipping products overseas, understanding these changes is crucial for your bottom line.

This comprehensive guide breaks down everything Australian business owners need to know about the current tariff environment, which markets are affected, how much you'll pay, and strategies to navigate these changes successfully.

The New US Tariff Landscape for Australia

In April 2025, the United States imposed sweeping new tariffs that fundamentally changed the trading relationship between our two nations. Despite the Australia-US Free Trade Agreement (AUSFTA) that has governed trade since 2005, Australian goods now face significant new duties when entering the American market.

Key Tariff Rates at a Glance

Timeline of Tariff Changes

Markets Most Affected by New Tariffs

1. Beef Industry - $4+ Billion at Risk

Australia's beef industry faces one of the most significant impacts. Previously enjoying duty-free access under the Free Trade Agreement, Australian beef now faces a 10% tariff that directly affects pricing for American consumers and reduces profit margins for exporters.

The tariff creates a direct cost increase that either cuts into exporter margins or raises prices for American buyers. With beef already being a competitive market, this disadvantage could shift market share to domestic US producers or competitors from countries with more favourable trade terms.

2. Wine Industry - $325 Million Annually

The Australian wine industry, which had gained significant market share in the United States due to competitive pricing and quality, now faces a 10% cost disadvantage relative to domestic American wines. With annual exports totalling approximately $325 million, this represents a substantial challenge for wineries that have invested heavily in the US market.

The timing is particularly challenging as the industry was still recovering from China's previous anti-dumping tariffs, which were only recently removed. Many producers had pivoted to the US market as an alternative, making this new tariff especially impactful.

3. Steel & Aluminium - 50% Tariff Wall

While Australian steel and aluminium exports to the US represented less than 0.2% of total export value in 2024, the 50% tariff rate is the highest imposed on any category. This effectively prices Australian metals out of the American market entirely for most applications.

The indirect effects may be more significant than direct export losses. Global steel and aluminium prices are being distorted by these tariffs, affecting Australian manufacturers who use these materials domestically.

4. Pharmaceuticals & Biotech - Potential 250% Tariffs

Perhaps the most concerning development is the proposed pharmaceutical tariffs. Australia exported approximately A$2.1 billion in medicines to the US in the previous year. The announced plan could raise pharma tariffs to 150% within 18 months and up to 250% long-term.

Major players like CSL and numerous SME pharmaceutical suppliers face significant uncertainty. The biotech sector, which has been a growing export industry for Australia, could see its US market access severely limited.

5. Agriculture Sector - $3.1 Billion Exposure

Beyond beef, the broader agricultural sector with exports valued at $3.1 billion now faces the 10% baseline tariff. This includes:

• Lamb and sheep meat - Premium Australian lamb faces price pressure
• Dairy products - Cheese and specialty dairy affected
• Nuts and produce - Macadamias, fruits, and vegetables
• Seafood - Lobster, prawns, and other premium seafood
• Grain products - Wheat and specialty grains

The De Minimis Rule Change: E-Commerce Impact

One of the most significant changes for small businesses is the suspension of the de minimis rule. Previously, goods valued under USD $800 could enter the US without incurring customs duties. This exemption has been removed, requiring all international parcels to be subject to duties and customs processing.

For Australian e-commerce businesses, this means:

• Every shipment to the US now requires customs documentation
• Customers face import duties on all purchases
• Shipping times may increase due to customs processing
• Price competitiveness is reduced compared to US-based sellers
• Alternative shipping providers must be found during Australia Post suspension

Australia's Trade with China: A Different Picture

While US tariffs dominate headlines, Australia's trade relationship with China—our largest trading partner—operates under different rules through the China-Australia Free Trade Agreement (ChAFTA).

ChAFTA Benefits

Since ChAFTA's inception, tariffs have been eliminated on 82% of Australian exports to China. By January 2029, 98% of Australian exports will enter China duty-free. This is a stark contrast to the new US tariff environment.

Recent China-Australia Developments

Despite occasional tensions, China remains far from closing the door on trade with Australia. The latest data suggests total Australian beef exports to China finished 2025 at around 265,000 tonnes. China is Australia's largest market for agricultural, forestry and fisheries products, topping $17 billion in 2024-25.

Australia's Domestic Import Tariffs

Understanding Australia's own tariff structure is important for businesses importing goods. Most goods imported to Australia attract a 5% customs duty based on their Free on Board (FOB) value.

Exemptions and Reductions

Customs duty may be waived or reduced when:

• Goods qualify under a Free Trade Agreement (FTA)
• A Tariff Concession Order (TCO) applies
• The goods are for specific purposes (e.g., manufacturing inputs)
• The goods value is below $1,000 AUD (GST still applies)

Australia's Free Trade Agreements

Australia has FTAs with multiple countries that reduce or eliminate tariffs:

• China (ChAFTA) - Comprehensive coverage, 98% duty-free by 2029
• Japan (JAEPA) - Preferential access for Australian exports
• South Korea (KAFTA) - Reduced tariffs on key exports
• ASEAN nations (AANZFTA) - Regional trade benefits
• United Kingdom (A-UKFTA) - Post-Brexit trade deal
• European Union - Negotiations ongoing

Economic Impact Assessment

The OECD has downgraded its global growth forecast to 3.1% in 2025 and 3.0% in 2026, citing higher trade barriers and increased policy uncertainty as key drivers. However, Australia's diversified export profile provides some insulation.

Government Response

The Australian Government has implemented several measures:

• $1 Billion Economic Resilience Program - Supporting sectors facing financial strain
• Diplomatic Negotiations - Seeking tariff exemptions or reductions
• No Retaliatory Tariffs - Maintaining diplomatic relations
• Trade Diversification Support - Helping businesses find alternative markets

Strategies for Australian Businesses

For Exporters to the US

1. Review Pricing Strategy - Determine whether to absorb costs or pass to customers
2. Explore Tariff Classification - Some goods may qualify for exemptions
3. Consider US-Based Operations - For larger exporters, local manufacturing or assembly may avoid tariffs
4. Diversify Markets - Look to Asia, Europe, and other regions
5. Document Origin Carefully - Ensure proper certificates of origin for any FTA benefits

For E-Commerce Businesses

1. Find Alternative Shipping Providers - During Australia Post suspension
2. Adjust US Pricing - Account for new duties customers will face
3. Consider US Fulfilment - Ship inventory to US warehouses
4. Focus on Other Markets - UK, EU, and Asia may offer better opportunities
5. Communicate with Customers - Be transparent about delivery changes and costs

For Importers

1. Leverage FTAs - Ensure you're using all available preferential rates
2. Check Tariff Concession Orders - May reduce duties on specific goods
3. Review Supply Chains - Consider alternative sourcing countries
4. Plan for Volatility - Build buffer stock where practical

Looking Ahead: What to Expect

The trade environment remains highly dynamic. Key developments to watch include:

• Negotiation Outcomes - Australia continues to seek tariff exemptions
• Pharmaceutical Tariff Implementation - Phased increases over 18 months
• Trade Remedies Reform - Consultation outcomes expected in 2026
• Global Supply Chain Shifts - Ongoing "secure trade" trends affecting all nations
• China Relationship - Continued importance as primary trading partner

Conclusion

The 2025 tariff changes represent the most significant shift in Australia's trade environment in decades. While the 10% baseline tariff and higher sectoral tariffs create real challenges, Australia's diversified economy and strong trade relationships with Asia provide resilience.

For individual businesses, success will depend on adapting quickly: reviewing pricing, diversifying markets, optimising supply chains, and staying informed about rapidly evolving policies. The businesses that treat this as an opportunity to strengthen their operations and explore new markets will emerge stronger.

Remember that trade policy is constantly evolving. What applies today may change tomorrow. Build flexibility into your business planning and maintain relationships with trade advisors who can help you navigate the complexity.

Sources & Further Reading

• Australian Government DFAT - Latest on US Tariffs
• PwC Australia - Tariff Impact Analysis
• Export Finance Australia - Tariff Effects on Economy
• Chambers - International Trade 2026 Australia Guide
• Australian Border Force - Current Working Tariff
• Easyship - Trump Tariffs on Australia 2025
• Reserve Bank of Australia - Tariff Trade Impact Analysis