The Albanese Government is appealing against a Trump administration decision to slap Australian products with a 12.5 per cent “slavery” tariff but the Trade Minster predicts exports to the United States will continue to soar despite the “disappointing” move.
Despite weeks of intense lobbying, Washington confirmed on Friday that Australia was among dozens of nations to face new American tariffs first proposed last month following a US trade investigation of forced labour.
On the sidelines of Labor’s national conference, Trade Minister Don Farrell called for the immediate withdrawal of the “unjustified” move, while Opposition Leader Angus Taylor declared the coalition was “dead against” the latest tariffs.
“These tariffs are unjustified, inconsistent with our free trade agreement, and should be removed,” Senator Farrell told reporters in Adelaide.
“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.”
Early on Friday morning (AEST) the Trump administration announced Australian exports to the US would be hit with a 12.5 per cent tariff, replacing the temporary 10 per cent levy that was due to expire.
The levy took effect from 12.01am Friday local time (2.01pm AEST), though some countries, including the UK, will only be subjected a lower 10 per cent rate. The Trump administration says the move is aimed at tackling forced labour and slavery, arguing American businesses are being placed at a competitive disadvantage because other countries are not doing enough to address the issue.
Australia and dozens of other nations including Brazil and China were found to have “failed to impose and effectively enforce a prohibition on the importation of goods produced with forced labour”, according to a US Trade department statement.
A separate list of countries including the UK, India, Indonesia, Canada and Mexico will be subject to a 10 per cent tariff after the US claimed they had only failed to “enforce” forced labour prohibitions.
“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,” US trade representative Jamieson Greer said.
“I am encouraged by the trading partners who have moved quickly to adopt forced labour import prohibitions, and look forward to ensuring their effective enforcement.”
However, many analysts believe the tariffs are effectively replacing broader trade measures struck down by the US Supreme Court earlier this year, with the forced labour investigation serving as the legal basis for the new policy.
The Federal Government and the Business Council of Australia both lodged formal submissions opposing the tariffs during the consultation period, which ended earlier this month. “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,” the Government said.
Senator Farrell said despite the tariffs imposed on Australia by the Trump administration as part of last year’s so-called “Liberation Day”, there had since been a substantial rise in exports going to the country.
“We are now exporting 67 per cent more product into the United States than before the so-called Liberation Day,” he said.
“We continue to maintain that these tariffs are unjustified. Australia is a country that deals with the issue of modern slavery seriously, and from my point of view, the Government’s point of view, we will continue to argue very strongly for the removal of these tariffs”.
The Trade Minister, pictured right, said Australia’s largest exports to the United States, namely beef, gold and copper, would continue to get into the United States tariff free, adding that “the volume of those products has been been increasing”.
“I think we will continue to have a high volume of trade into the United States, but we’re always looking for new markets.”
“This Government has diversified our trading relationship in a way that no other government has,” Senator Farrell said.
Asked whether the Government was disappointed with the decision, Defence Minister Richard Marles said it was because they “make no sense”. “We are making the argument very forcefully and loudly that we believe in an open global trading system ... we want to see less tariffs rather than more,” Mr Marles said during a visit to Adelaide’s Osborne shipyard.
“The US-Australia Free Trade Agreement has been enormously beneficial to jobs in the United States, as it has been for jobs here in Australia, and we will continue to make that argument very clearly to the United States.”
Business groups including the Australian Chamber of Commerce described the new set of tariffs as a “ludicrous decision” that was “completely unjustified”. “The rationale that’s been given for why the United States is imposing this additional tariff on Australia really has no basis at all,” ACCI chief executive Andrew McKellar said.
“They’ve tried to link it to so-called forced labour issues. But the reality is Australia has some of the highest standards to combat modern slavery of any country in the world.”
In Australia, economic analysts also warned that the latest tariffs from the US could force energy prices and inflation to remain high.
“The new levies are issued under Section 301 of the Trade Act of 1974, a legally more durable basis than the Section 122 tariffs that expired at the same time,” Commonwealth Bank associate director Carol Kong said. “The tariffs add to downside risks for growth and upside risks to inflation, particularly as energy prices are likely to remain elevated for longer.”
This month, the Government announced it would strengthen Australia’s anti-slavery laws with harsher penalties.
Under the changes, companies with annual revenue of more than $100 million will be subject to a new criminal offence, in addition to a new civil penalty under the Modern Slavery Act, which was last updated in 2018.
An estimated 50 million people around the world are living in modern slavery, according to the Global Slavery Index, including people who are trafficked or subjected to forced labour.
During a visit to Tasmania, Mr Taylor also spoke out against Mr Trump’s decision to impose tariffs on Australian exports to the US.
Speaking at Bell Bay, a recently closed manganese alloy smelter in the north of the State, he urged the Trump administration to reverse its decision.
“They are a great friend and they shouldn’t impose taxes on our exports to the United States,” Mr Taylor said.
“We’re dead against it and we’ll work with the Government and other to do everything we can to roll that back.”
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