US Tariffs on Australian Imports Rise to 12.5 Per Cent
Importers of Australian goods face higher costs and new, strict supply chain due-diligence requirements.
Updated on Oct. 15, 2026 in International Trade
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The United States has imposed a 12.5 per cent tariff on Australian exports, citing concerns over goods produced through forced labour. This trade action arrives as Australia considers a legislative overhaul that would introduce criminal penalties for companies failing to address supply chain risks.
Why it matters
The tariff creates immediate price pressure for businesses importing from Australia, while the proposed local regulatory changes threaten to increase operational compliance costs. Operators must prepare for both potential supply chain disruption and stricter mandatory due-diligence requirements.
The US has hiked tariffs on Australian exports to 12.5 per cent, up from 10 per cent, impacting a $25 billion annual import volume. The trade measure comes as Canberra works to formalize new criminal offences for modern slavery, which will join existing reporting mandates.
The players
Chris Evans
The Australian anti-slavery commissioner who maintains that criminal prosecutions are insufficient to address daily supply chain operations.
Anthony Albanese
The Prime Minister of Australia who is currently seeking relief from the recently imposed US import tariffs.
Donald Trump
The President of the United States who has agreed to consider a tariff exemption for Australian goods.
The details
The proposed Australian overhaul mandates due-diligence obligations and grants victims new rights to seek compensation via litigation. Current law only requires large companies to report supply chain risks without imposing specific operational obligations. The government plans to pair these new criminal penalties with civil sanctions for companies that fail to implement robust anti-slavery controls in their daily procurement.
Timeline
2018: Modern Slavery Act introduced.
July 2026: Government announced planned criminal offence for modern slavery.
August 2026: Prime Minister Anthony Albanese and President Donald Trump discussed potential tariff exemptions.
October 15, 2026: Anti-slavery commissioner Chris Evans released a paper criticizing the government's proposal.
Market Landscape
The proposed 2026 legislative overhaul shifts the existing framework established by the 2018 Modern Slavery Act from voluntary reporting to mandatory criminal liability. This change aligns with increasing international trade pressure regarding supply chain transparency.
Importers should conduct a comprehensive review of Australian suppliers to identify potential forced labour risks before new regulations take effect. Consult with legal counsel to assess how upcoming criminal penalties for due-diligence failures could impact your business liability.
The takeaway
The move toward criminalizing modern slavery oversight failures signals that voluntary disclosure is no longer sufficient for regulatory compliance. Monitor upcoming federal guidance to confirm exactly which supply chain components will be subject to the new mandatory due-diligence standards.
Further reading
For broader trends in global supply chain requirements, see our coverage of International Trade.
Source note: This article includes information reported by The Age.
Live Poll
Should the government mandate that large companies legally address forced labour risks in their supply chains?
