Australia objects to US tariff proposal
The Australian government has formally objected to a US proposal to impose a 12.5% tariff on Australian goods, arguing that the finding underpinning the tariff lacks credible evidence. The objection was lodged with the US Trade Representative (USTR) by Australia's acting top trade diplomat in Washington, Erin Kelly, according to ABC Australia.
The US intends to apply the 12.5% tariff as part of a broader investigation into forced labor in supply chains. The tariff would replace a 10% tariff that was struck down by the US Supreme Court in February. The legal basis for the new tariff is an investigation into forced labor and slavery, launched shortly after the court ruling. That investigation concluded that several of the US's major trading partners had failed to adequately prevent forced labor, leading to proposed tariffs across the board.
Australia's submission argues there is "no credible evidentiary basis" for the finding against Australia. It points out that the US's own annual Trafficking in Persons Report, which assesses countries' efforts to prevent forced labor, has consistently given Australia the highest possible rating.
The submission also contends that the proposed 12.5% tariff is unfair compared with other countries, where smaller tariffs are proposed. For example, the UK, which "takes a similar approach to Australia in combating forced labour in supply chains," would face a 10% tariff. Countries rated worse than Australia in the Trafficking in Persons Report, including Bangladesh, Cambodia, Malaysia, Pakistan, and Indonesia, would also face a 10% tariff.
Australia's objection reiterates the government's long-held argument that such tariffs violate the US-Australia free trade agreement. It also notes that Australia has been working constructively with the US on trade issues.
Separate investigation into lamb imports
In a related but distinct development, the US International Trade Commission (ITC) is investigating whether to impose additional tariffs on Australian lamb. The investigation, formally requested by Ambassador Jamieson Greer under the Trade Act on July 13, follows an October 2025 petition from the American Sheep Industry Association. The petition claimed that a flood of imported lamb was being sold at lower prices, displacing local production and eroding profitability.
Most imported sheep meat in the US comes from Australia. In 2025, Australia exported about 100,000 tonnes of sheep meat to the US, valued at more than $1 billion. Lamb and mutton imports to the US currently attract a 10% tariff.
The Australian sheep industry expressed disappointment at the investigation but said it was prepared to respond. Tim Ryan, CEO of the Australian Meat Industry Council (AMIC), said the industry was confident it could deliver a "robust, fact-based case demonstrating the mutual benefit of Australia's trade." He noted that Australian lamb exporters had built longstanding relationships with US customers and that increased Australian imports had helped underpin the maintenance and growth of lamb consumption in the US.
Bonnie Skinner, chief executive of Sheep Producers Australia, said farmers would work together to present their case, emphasizing that Australian supply complements domestic production and helps meet year-round consumer demand for lamb.
Reactions and outlook
Australian officials and industry leaders have framed the tariff proposals as inconsistent with the US's own assessments and with the treatment of other trading partners. The government's submission to the USTR highlights the disparity between the proposed tariff on Australia and those on other countries, particularly the UK.
The ITC investigation into lamb imports will examine whether imports from all countries threaten the US domestic industry. The outcome of that investigation, along with the broader tariff proposal, remains to be seen.