We attended Austrade’s “Navigating US Tariff Changes” Webinar on Wednesday, 9 April 2025 at 11:00am AEST and have the following highlights to share with you. 

General Overview

• The US has imposed a 10% tariff on Australian goods, effective 5 April 2025. While not catastrophic on its own, the bigger concern lies in indirect impacts -many Australian goods are exported to other countries (e.g. Vietnam, Canada), which then re-export to the US. These supply chains could now be subject to higher tariffs, potentially resulting in reduced demand and decreased exports.

• In more complex supply chain scenarios (e.g. multiple parts sourced from multiple countries), it’s strongly advised to seek legal advice before taking action, especially where country of origin or classification may be ambiguous.

Key Industry Examples

• Beef Exports

  Beef was identified as the Australian export most at risk from these new tariffs. The US is likely to favour suppliers like Canada, making Australian beef less competitive. As a response, Australia will look to expand trade with alternative markets such as China and South Korea.

• Manufacturing

  In cases where component parts are assembled in Australia—e.g. steel plates made in Australia but exported via China—these may be classified as derivative products under Section 232, attracting a 25% tariff, rather than the base 10%. If these products are shipped from countries under stricter scrutiny, tariffs of up to 45% could apply depending on origin and classification.

• Fashion / E-Commerce

  Example: A T-shirt sold online via an Australian website, but made from Vietnamese cotton, would now face a 46% tariff when entering the US.

Key Questions & Clarifications

What are counter tariffs?

These are retaliatory measures imposed in response to another country’s tariffs. They serve as a direct response to tariffs placed on a country’s own exports.

Are tariffs the same as duties and taxes?

Yes—tariffs are a form of import duty, paid by the importer to the US customs authority.

Are there any exemptions?

Some goods are currently exempt or under review. Notable exemptions and watchpoints include:

• Steel & aluminium – already at 25%

• Automobile parts – 10% (but some categories may attract 25%)

• Timber & lumber, copper and derivative products – subject to US Section 232 investigation

• Semiconductors, selected pharmaceuticals, critical minerals, and energy products – possible future inclusion

Are services affected?

No—services are not subject to these tariffs. Only physical goods are impacted.

Why is the US doing this?

The policy has been introduced by the Trump administration, now back in office, reflecting a protectionist approach to trade. The US aims to:

• Reduce trade deficits

• Encourage domestic manufacturing

• Safeguard national security through tighter control of imports

For further insight, it’s worth reviewing the official order: “Regulating Imports with Reciprocal Tariffs.”

Impact on Australia

• Higher prices reduce demand, which may lead to lower sales for Australian exporters.

• Second- and third-order impacts may be felt across supply chains where Australia isn’t the final exporter.

• For example, Vietnam is Australia’s largest export market for cotton—but with Vietnamese exports to the US now attracting a 46% tariff, this may decrease Vietnamese demand, reducing our cotton exports to them.

Impact on the Australia-US FTA

• The US has implemented these tariffs over and above existing Free Trade Agreements, claiming national security concerns.

• The Australian Government has voiced concern, stating this is not in line with the spirit of the agreements.

Australia’s Response

• Australia is not planning reciprocal tariffs, as this would increase domestic costs and potentially harm local businesses.

• The government is actively monitoring the situation but has not announced any formal countermeasures.

No End Date in Sight

These tariffs have been introduced without a fixed end date, and should be considered a medium- to long-term policy shift for now.

What Can Businesses Do to Prepare?

1. Understand your Harmonised Tariff Codes and Rules of Origin—correct classification is essential.

2. Seek legal advice where supply chains are complex or multi-jurisdictional.

3. Talk to your customers and suppliers—understand how pricing and sourcing might shift.

4. Explore diversification—consider:

   “What does a diversified export strategy look like for your business?”

This situation presents both risk and opportunity—businesses that adapt quickly will be best positioned to weather the changes.

Please drop us a line if you need assistance.

Have a great Wednesday.

Ashley

CEO & Co-founder

The Startup Nerds