US Proposes 12.5% Tariff on Australian Imports in Forced Labor Dispute

The United States has proposed a 12.5% tariff on imports from Australia and 53 other nations, citing inadequate action against forced labor in global supply chains.

The proposed tariff follows an investigation by the Office of the United States Trade Representative (USTR), which determined these countries have not adequately prohibited imports made with forced labor, creating what it described as an uneven playing field for American workers. The measure is part of a broader effort to revive trade policies following a Supreme Court ruling that invalidated a previous tariff regime.

Key Details of the Tariff

• The proposed 12.5% rate applies to Australia and 53 other nations, including China, India, Japan, the United Kingdom, and New Zealand.
• A separate group of six economies—Canada, the European Union, Ecuador, Indonesia, Mexico, and Pakistan—face a lower 10% tariff, as they have imposed forced labor import prohibitions.
• The tariff is based on a Section 301 investigation under the Trade Act of 1974, as well as Section 307 of the US Tariff Act of 1930 and the 2022 Uyghur Forced Labor Prevention Act.
• The proposed tariff would replace an existing 10% tariff on all countries imposed earlier this year, which is due to expire in July. According to trade lawyer Patrick Childress, tariffs from different investigations may stack, potentially leading to higher cumulative rates for some countries.
• Certain products are exempt, including beef and other food items, pharmaceuticals, rare earths, gold, energy, coffee, some fruits and vegetables, metals, and certain fuels and chemicals.
• The 60 economies reviewed account for 99.4% of US imports.

Process and Timeline

The proposed tariffs will not take effect immediately.

A public consultation process is underway, with hearings beginning July 7. Affected countries have until July 6 to submit a response. The USTR is also conducting a separate Section 301 investigation into manufacturing overcapacity, which may lead to additional tariffs on other countries.

Justification from the United States

USTR Jamieson Greer stated that the US will "no longer tolerate" countries that fail to address forced labor in supply chains, asserting that such inaction burdens US commerce.

A report accompanying the decision provided no specific evidence regarding each country's practices. The USTR investigation cited International Labour Organization estimates that 27.6 million people were engaged in forced labor globally in 2021. Products identified as at risk include rice from Myanmar, tobacco from Malawi, beef from Brazil, and cotton and polysilicon from China.

Australian Government Response

The Australian government has disputed the basis for the tariff.

• Prime Minister Anthony Albanese called the proposed tariff "unjustified" and argued that Australia has strong modern slavery legislation.
• Trade Minister Don Farrell met with the USTR in Paris to argue against the tariff. A spokesperson stated the tariffs are inconsistent with the Australia-US Free Trade Agreement and noted Australia has "robust, comprehensive and world-leading legislation" addressing forced labor and modern slavery.
• Foreign Minister Penny Wong reiterated Australia's opposition to tariffs and commitment to open trade.

Reactions from Officials and Analysts

Chris Evans, Australia's Anti-Slavery Commissioner

"The US investigation was cursory and not genuinely motivated by human rights concerns."

Evans described the tariff as "a distraction and a weaponisation of trade measures," arguing it is not about modern slavery. He acknowledged that Australia's current modern slavery laws are outdated and insufficient, advocating for stronger due diligence obligations on companies. He warned that Australia risks becoming a market for goods produced under unlawful practices because they are unable to enter more regulated markets.

John Kunkel, Senior Fellow, University of Sydney US Studies Centre

Kunkel stated that Greer is attempting to restore elements of the Trump tariff regime on a more solid legal basis following the Supreme Court ruling.

Freya Dinshaw, Associate Legal Director, Human Rights Law Centre

Dinshaw said Australia is vulnerable if the US penalizes countries lacking sufficient steps to prevent forced labor.

Joe Hockey, Former Australian Ambassador to the US

Hockey suggested the tariffs are motivated by US fiscal needs.

Patrick Childress, Trade Lawyer

Childress said the administration was seeking continuity in tariff policy after the Supreme Court ruling.

Background on Forced Labor and Modern Slavery in Australia

An estimated 41,000 people in Australia are in forced labor or modern slavery.

• Australia's Modern Slavery Act was passed in 2018 and requires companies to disclose slavery risks in their supply chains. A 2023 independent review found the Act has not produced measurable change for victims and recommended penalties for non-compliance and a human rights due diligence requirement.
• Commissioner Evans has advocated for new legislation to mandate that Australian companies address modern slavery within their supply chains, proposing a legal obligation to perform due diligence similar to anti-money laundering and terrorism financing duties. He seeks authority to designate specific industries, products, or services as high-risk.
• In March, the UN Committee on Economic, Social and Cultural Rights called on Australia to introduce mandatory human rights due diligence.
• A coalition of over 100 investors, businesses, unions, and civil society organizations called for due diligence requirements on large companies operating in Australia.
• According to Fair Supply, over 21% of Australia's imports last financial year were linked to supply chains where modern slavery is known to occur.
• Reports of human trafficking to Australian Federal Police have nearly doubled in five years.

Specific Cases Cited in Reporting

Ansell and Mediceram

Glove-maker Ansell faced allegations related to its Malaysian supplier, Mediceram, concerning the treatment of Bangladeshi workers. Activist Andy Hall filed a complaint alleging wage theft, forced labor, and passport confiscation. Mediceram initially agreed to remediation payments, but workers later accused the company of breaching the agreement and went on strike, leading to deportations. Ansell stated it responded swiftly, provided financial assistance, and suspended its relationship in October 2025. Mediceram's chairman, Arumugam Suppiah, denied abusing worker rights and attributed the company's collapse to Hall's actions.

Kmart

The Australian Uyghur Tangritagh Women's Association (AUTWA) initiated legal action against Kmart in the Federal Court, seeking documents regarding two suppliers with connections to China's Xinjiang region to determine if they utilize forced Uyghur labor. UN experts have indicated that China's program of detaining and transferring Uyghurs to work camps may constitute forced labor. Kmart affirmed its commitment to human rights and expressed disappointment that AUTWA pursued legal action without first meeting. AUTWA's solicitors stated the proceeding followed over 12 months of Kmart's refusal to provide requested documents.