Australia now faces a 12.5% US tariff from July 24, replacing the temporary 10% duty enforced on most countries.
“The biggest impact for WA will likely be felt in the agricultural sector, although there are carve outs for some sectors such as beef exports,” he said.
“Our farmers are already grappling with higher oil prices and lowered supply of fertilisers because of the disruptions in the Strait of Hormuz.
“This underlines the increased importance of growing new trade opportunities and diversifying our markets.”
READ MORE: How to minimise risk amid increased trade uncertainty
Tariffs conflict with free trade agreement
Australian Chamber of Commerce and Industry CEO Andrew McKellar said the “ludicrous” tariff ignored the free trade agreement (FTA) between the two nations.
“The US has again unilaterally cast aside its FTA obligations with Australia,” he said.
“Australia and the United States signed a free trade agreement in 2005 for the purposes of enhancing trade, and these tariffs are in clear breach of that agreement.”
Under the FTA, duties should only be imposed for less than 3% of Australia’s non-agricultural imports and one-third of agricultural products entering the US.
But tariff exemptions only apply to a selection of exports, including beef, gold and copper. Some goods have even higher rates, such as 100% for pharmaceuticals.
READ MORE: How FTAs benefit Australian businesses
Force labour reasoning questioned
According to a US Government statement, the measures strike “an overdue blow against the prevalence of forced labour in global supply chains” and call on other nations to do the same.
But McKellar challenged this reasoning.
“Australia has some of the highest protections and enforcement against modern slavery anywhere in the world,” he said.
“The US Administration’s decision will reduce trade and increase costs for US businesses and consumers.
“ACCI as well as the business community are willing to work closely with the Australian Government to try to resolve this issue.”
Do you have questions about how trade regulations – including tariffs – could impact your business?
CCIWA’s International Trade Services team can help. Get in touch at [email protected] or call 08 9365 7620.
