What do the latest tariff and trade measures mean for Australian businesses?

The US Government has implemented a series of widespread trade and economic policies, that seek to boost federal revenue, reduce the $1.2 trillion trade deficit and protect national interest and domestic industries.  

The global community’s response to the US trade policies has largely seen either the imposition of retaliatory tariffs or an acceptance of increased US tariffs with attempts to negotiate the removal of these tariffs.

Protectionist policies and geopolitical tensions continue to proliferate in other territories through non-tariff barriers, and broader economic and trade regulatory policies. For example, China’s imposition of export controls on rare earth minerals and Australia’s expansion of the export control legislation (to align Australian requirements to US regulations under AUKUS).

The impact of these shifts, along with the effects on the US Dollar, US equities and other currencies and markets, has increased the uncertainty, volatility and cost of international business in turn slowing US-inbound trade and deepening uncertainty around international supply chain operations.

The pace at which these changes are implemented by the US and other Governments, often without regulatory guidance, grandfathering or ‘grace periods’ combined with a multitude of competing counter measures requires real time and a continuous 'analyse, decide, reset, comply and then revise again' cadence.  

• US and China agree a Trade Deal following two days of negotiation in London, UK. China is to remove export controls on rare earth minerals, while the US has walked back threats to revoke visas of Chinese students. US tariffs fall to a total of 55% (being 10% reciprocal tariffs (IEEPA), 20% fentanyl tariffs (IEEPA), and 25% tariffs (section 301 - in place from Trump’s first term). Chinese tariffs have been announced at 10%.

• The US has increased the steel and aluminium tariffs (section 232) from 25% to 50% (all countries) as of 4 June 2025¹.

• While the US Court of International Trade ruled some of the trade measures implemented by Trump in this second-term were invalid, these measures remain in effect due to an appeal filed by the Trump administration. Specifically, these were measures made under the International Emergency Economic Powers Act (IEEPA):

  • 25% tariffs on Canadian goods (10% on energy products) 
  • 25% tariffs on Mexican imports  
  • Liberation Day ‘Reciprocal’ tariffs on most US Trading partners (ranging 10% to 54%)
  • Additional 20% tariffs on Chinese imports (i.e. the fentanyl tariffs)
  • Removal of the de minimis exemption for goods less than USD$800 imported from China¹

• The US and China agree to a 90-day pause on escalating tariffs each country imposed on the other over the April-May period (145% on China | 125% on US). This pause is intended through to 11 July 2025 although the June Trade talks (currently underway) may affect this pause¹.

• Trump announces a 90-day pause on the Liberation Day reciprocal tariffs (IEEPA) imposed on all US trading partners (ranging from 11% to 50%). The higher tariffs are paused and reduced to 10% across all countries until end of pause. Certain countries listed on Annex I to the Executive Order are subject to the higher additional tariff rates of between 11% to 50% from 9 July 2025 (unless trade negotiations result in a delay or new tariff arrangement). In particular:

  • Australian and New Zealand-originating goods subject to the baseline additional tariff rate of 10%.
  • European Union (EU) originating goods will be subject to an additional 0% tariffs following the 90-day pause period (Trump has threatened to increase these tariffs from 20% to 50%¹ ), and
  • the highest additional duty rates will apply to Lesotho (50%), Cambodia (49%) and Laos (48%) (following the 90-day pause period).

The additional tariffs will only apply to the non-US content of the goods, provided that at least 20% of the value of the goods is US originating.

However, the additional rates of duty will not apply to the following

• goods in transit (e.g. have been loaded onto a container ship) before the operative dates of the additional tariffs even if they arrive in the US after this date

• articles subject to additional duties under previous Executive Orders, namely:

  • articles and derivatives of steel and aluminium imported from all countries which are subject to 50% tariffs from 4 June 2025 (previously 25% tariff under Section 232)  
  • automobiles and automotive parts imported from all countries which are subject to 25% tariffs (Section 232) from 3 May 2025.  Approved importers of automotive parts used in the final assembly or manufacture of automobiles in the US may also qualify for the Import Adjustment Offset (IAO). The IAO allows for a 3.75% offset of the aggregate Manufacturer’s Suggested Retail Selling Price (MSRP) of all US assembled automobiles in year 1 (3 April 2025 to 30 April 2026) and a 2.5% offset in year 2 (1 May 2026 to 30 April 2027).
  • goods imported from Canada and Mexico which are subject to 25% tariffs from 4 March 2025, except for energy resources and potash imported from Canada which are subject to 10% tariffs from 7 March 2025 (IEEPA). However, goods from Canada or Mexico that meet the requirements under the United States-Mexico-Canada Agreement (USMCA) can still enter under the US under preferential duty terms, and
  • low value goods from China or Hong Kong (i.e. valued under US$800) which are subject to the additional tariffs for China outlined above if they are imported as cargo into the US from 2 May 2025. However, if they arrive via the postal system, they would be subject to 120% tariffs or $100 per item from 2 May 2025 (increasing to $200 per item from 1 June 2025) (IEEPA)².

• certain donations for humanitarian purposes, informational materials (such as publications, photographs, CDs, tapes, artworks etc.) or accompanied baggage for personal use

• other goods outlined in Annex II to the Executive Order, including copper, pharmaceuticals, semiconductors, lumber articles and certain critical minerals, and energy and energy products;

• all goods imported from countries that the US does not maintain normal trade relations with, including Cuba, North Korea, Russia and Belarus

• goods that may become subject to additional tariffs under any future measures which may be enacted to combat national security concerns (Section 232), and

• low value imported goods that currently qualify for duty-free treatment under the de minimis rules (i.e. goods valued under US$800) but excluding low value goods from China and Hong Kong² as outlined above.

So where does this leave Australia? It’s complicated, but the story isn’t all bad.  

While US tariffs on Australian goods exist, they remain equal to, or lower than, key competitors. Australian exporters will therefore have a greater relative advantage in niche or luxury markets which prefer imported goods to US domestic products. By way of example, Australian specialty cheese and wine will have a 10% lower tariff than French, Greek or Italian equivalents. Australian wagyu beef will enjoy a 14% lower tariff than Japanese wagyu (once reciprocal tariffs are restored from 9 July 2025). 

Conversely, there may be reduced demand for Australian exports of primary or intermediate materials which are used in exports from countries such as China to the US. This indirect effect is estimated to be four times as large as the direct impact of tariffs on Australian goods themselves.  

It should be noted that the Australian Prime Minister, Anthony Albanese, has confirmed (at least for the moment) that Australia will not impose retaliatory tariffs on US imports, so businesses which source from the US will not experience a direct impact. This is in line with the current Government’s economic modelling in the 2025-26 Federal Budget, which concludes that US tariff increases and global retaliatory tariffs would only result in a 0.2% change in Australian real GDP by 2030.    

However, it is possible that other countries will respond differently, and Australia may benefit from retaliatory tariffs applied to US exports in certain markets like the EU.  

Our earlier article on US tariffs sets out helpful list of challenges and opportunities which Australian businesses should seek to evaluate to gauge potential impact on their operations. Refer to the article for additional insights on factors such as: 

• cost of operations in the US to potentially increase 

• indirect impact through global supply chains  

• eCommerce shipments direct to US customers may slow and costs may increase 

• compliance burden and cost to increase 

• freight in a potential state of flux (again) 

• currency fluctuations, and 

• increased anti-dumping measures to protect domestic industries. 

Significant tariff changes of this magnitude will naturally require businesses to assess their trade profiles to determine the full impact of the measures, both on their direct and indirect product flows, additional costs to comply, and to understand what mitigation tactics and strategies could be implemented. 

Evaluating the effects and determining the degree of changes needed by analysing the impact of tariff increases on purchases and sales will need to be undertaken. This will help to understand how your business model is affected and whether structural or value chain changes, such as altering manufacturing models or shifting sourcing, are necessary. This will also require a detailed understanding and analysis of your 'new' customs duty profile throughout your entire supply chain as a result of the measures to identify any potential to mitigate duty liabilities, for example, by reassessing origin, exploring customs valuation reduction strategies or utilising duty drawbacks (where available).   

A more detailed summary of what Australian businesses can be doing now to fully assess the impact of President Trump’s tariff policy including potential strategies could be implemented can be found in our prior article. 

Critically, where businesses are considering or undergoing potential business model reinvention, trade compliance and tax will now need to be at the epicentre of these decisions. 

For example, PwC’s 2025 Global “Reframing Tax” Survey found that less than 43% of respondents felt that they were well-placed to handle rapid regulatory change. Further, 90% of respondents recognised they have a skills gap in their tax function. Given the latest tariff measures, now more than ever, customs and tax will have a key role to play in businesses’ strategic transformation decisions.

At PwC, we leverage our extensive expertise and experience in the customs and trade field to assist businesses in navigating the complexities of the evolving trade environment. Our dedicated team of trade professionals is adept at providing strategic insights and customised solutions to help companies assess and solve their important problems.

¹Updated on 13 June 2025

²Updated on 11 April 2025

³125% as of 11 April 2025. Previous updates on this figure:

• 84%, 9 April 2025
• 34%, 3 April 2025