The United States is set to increase tariffs on Australian products to 12.5 per cent from Friday afternoon.
The increase comes after the current 10 per cent rate, imposed in February, was due to expire, with the White House arguing it was a response to forced labour practices.
However, critics have claimed that the human rights explanation is simply a method to circumvent legal challenges that have curtailed President Donald Trump’s ability to impose tariffs on other nations.
The US Supreme Court initially struck down a host of Washington’s duties in February, though authorities responded by using different methods to impose a lower 10 per cent rate.
In response, Australia’s Trade Minister, Don Farrell, called the tariffs “unjustified” and inconsistent with existing free trade agreements.
“Australia’s measures to combat forced labour and modern slavery are among the strongest in the world, and we are recognised globally, including in the US, for our leadership,” he said.
Under the new rules, countries that have imposed a forced labour ban will be hit by a 10 per cent tariff, which includes the UK, EU and Canada.
Economies that the White House claims have not, such as Australia, China and Japan, will be subject to the higher 12.5 per cent rate.
Significantly, goods already facing sector-specific tariffs, such as steel and aluminium, will not be affected.
The new rules will take effect from 2pm Friday AEST.
In a statement, US Trade Ambassador Jamieson Greer encouraged countries to enforce a US-style ban on forced labour.
“The United States has had a forced labour import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same,” Greer said.
“Today’s action will begin to correct what is both a human rights abuse and a distortive trade practice to improve the welfare of workers everywhere.”
The new rules effectively sidestep the earlier Supreme Court ruling by imposing Section 301 of the Trade Act, which allows the US to act against unfair trade practices.
Just last week, the Australian Federal Government unveiled sweeping new reforms to prevent forced labour in its global supply chain.
Attorney-General Michelle Rowland said that companies with revenue higher than US$100 million could commit a new offence if they fail to stop modern slavery practices.
“Australians rightly expect that the products they buy are not made on the back of modern slavery, which is why the Albanese Government is delivering a legislative framework with teeth,” said Rowland.
“The proposed changes will introduce greater accountability, levelling the playing field for the majority of Australian businesses already doing the right thing.
“We will continue to work closely with stakeholders to inform the design of the proposed legislative changes, ensuring we strengthen efforts to combat modern slavery while continuing to support Australian businesses.”
