The Impact of Tariffs in Australia: Everything You Need to Know

Tariffs play a major role in shaping the cost of trade, and in 2025 they’ve become a pressing issue for Australian businesses. The United States has recently made changes to tariff rules, creating new challenges for both small and large business owners who rely on importing or exporting goods.

Whether you run a small export-focused operation or manage a larger business trading across borders, the US tariffs on Australian exports can directly affect your costs and profitability. In this article, we’ll explain what tariffs are, outline the significant updates made in 2025–2026, and discuss what these changes mean for Australian businesses navigating the global marketplace.

Key takeaways

• US tariffs are hitting Australian exporters: Most goods face a 10% baseline tariff, with steel, aluminium, copper, and automotive exports seeing higher rates.
• Importers may face higher costs: Reciprocal tariffs and supply chain delays can affect businesses bringing goods into Australia.
• Some industries are more affected: Metals, automotive, energy, and small-scale e-commerce face the biggest tariff pressures.
• The reasoning behind the changes: The US has introduced tariffs to protect domestic industries, counter foreign subsidies, prevent dumping, enforce origin rules, and safeguard national security.
• Proactive planning is essential: Business owners can use tools like QuickBooks to manage cash flow, adjust budgets, monitor costs, and more.

How do trade tariffs work in Australia? 

What are tariffs, and how do they work in Australia?

Trade tariffs are essentially taxes placed on goods that are imported into or exported out of a country. In Australia’s case, tariffs are applied by other countries on Australian exports, and by Australia on goods entering our market. The aim is usually to protect local industries, raise government revenue, or respond to international trade disputes.

Here are the basics:

Who pays tariffs?

When Australian goods are exported overseas, the importer in the destination country pays the tariff to their government. While exporters don’t pay tariffs directly, the costs often flow back through reduced demand, squeezed margins, or higher prices for consumers.

What’s their role?

Tariffs can make imported goods more expensive, helping domestic producers stay competitive. For exporters, tariffs imposed by another country (like the US) can limit market access or reduce profitability.

Why the confusion?

Recent changes, including the new 2025–2026 US tariffs, have created uncertainty for many Australian businesses. Shifting rates across industries (such as steel, aluminium, and automotive) mean businesses must stay informed to remain compliant and competitive.

The Australian Department of Foreign Affairs and Trade (DFAT) provides up-to-date information here: Australia's free trade agreements (FTAs).

What tariffs does Australia have currently?

Here are some of the most important tariffs affecting Australia in 2025. Some are new, others are removals or pauses:

US 10% baseline tariff on Australian exports

As of 5 April 2025 (3.01pm AEST), the United States imposed a 10% baseline tariff on most goods originating from Australia. This applies broadly across sectors, though some strategic sectors (like steel, aluminium, autos) face higher “reciprocal” tariff rates. (Source)

Australia’s “nuisance tariff” abolition plan

The Australian Government is removing hundreds of what are called “nuisance tariffs”—these are small import duty lines that cost more in compliance than they generate in revenue. Around 500 of them will be abolished, reducing costs for businesses and simplifying trade. (Source)

AusPost’s US service update

Due to new US customs and tariff regulations (including changes to de minimis exemptions), Australia Post temporarily suspended many shipping services to the US from 26 August 2025. There are updated requirements for mandatory tariff payments, declarations, and in some cases, tariffs must be prepaid. Services have been/are being restored following alignment with new rules. (Source)

Indexation of excise-equivalent rates (pause)

In the 2025-26 Federal Budget, the government announced a two-year pause starting from August 2025 on the biannual indexation of draught beer excise and excise-equivalent customs duty rates. This means those rates will not increase automatically with inflation (CPI) for the next 2 years, easing cost pressures for breweries, pubs, and related businesses. (Source)

To access a comprehensive list of all tariffs applicable to Australian businesses, you can consult the ​​​​​​​current tariff classification on the Australian Border Force website.

Types of tariffs in 2025

Australian businesses may encounter a range of tariffs, fees, and charges when importing or exporting. Here are the key types in place during 2025:

How will tariffs affect Australian business owners? 

A question that’s being asked right now is are tariffs good or bad? And more specifically, how will the recent changes affect Australian businesses? 

Here’s what you need to know:

Exporters to the US

Australian exporters sending goods to the US are likely to feel the most immediate impact. With the ‘Liberation Day’ tariffs now in effect, most Australian goods face a 10% baseline tariff, while certain products like steel, aluminium, copper, and automotive exports face much higher rates (up to 50%).

This can lead to:

• Higher costs for US customers, which may make Australian products less competitive.
• Pressure on profit margins, especially for small and medium-sized exporters.
• Increased compliance requirements, such as stricter country of origin documentation to avoid penalties for transhipped or mislabelled goods.

Exporters in sectors under active review (including timber, semiconductors, pharmaceuticals, and commercial aircraft) face uncertainty, with the potential for new tariffs or import restrictions once reviews conclude between late 2025 and early 2026.

Importers into Australia

Australian businesses that import goods may also experience knock-on effects:

• Increased costs for imported products from countries affected by reciprocal tariffs.
• Potential supply chain delays, as global partners adjust to US and international tariff changes.
• The need for careful budgeting and pricing strategies, particularly for businesses relying on low-cost imports.

Sector vignettes

Some industries will feel tariffs more sharply than others:

• Metal and manufacturing: Steel, aluminium, and copper exporters face steep tariffs, while manufacturers using these materials may see higher input costs.
• Automotive: Light trucks, certain vehicles, and parts exported to the US are hit by a 25% tariff, potentially affecting demand.
• Energy and critical resources: Some exemptions exist, but ongoing reviews of semiconductors, polysilicon, and other strategic minerals could reshape market access.
• Small-scale online businesses: The end of the de minimis duty exemption means that even low-value shipments to the US are now subject to tariffs, increasing costs for e-commerce exporters.

Why have tariffs been introduced? 

The US recently implemented the ‘Liberation Day’ tariffs on 7 August 2025, impacting imports from countries including Australia. These changes have been driven by a combination of economic, strategic, and security considerations:

Protect domestic industries

The US has maintained high tariffs on steel, aluminium, and copper products to shield its domestic manufacturers from cheaper imports. These measures aim to safeguard American jobs and industrial capacity. (Source)

Generate government revenue

While not the primary goal, the tariffs contribute additional revenue for the US government, particularly on high-value imports like automobiles and critical minerals. (Source)

Support anti-dumping measures

Tariffs also target goods that could be sold below fair market value. For example, steep tariffs on certain metals and automotive products help prevent foreign producers from undercutting US businesses. (Source)

Counter foreign subsidies

By imposing higher rates on products from countries that subsidise exports, the US aims to level the playing field for American companies competing internationally. (Source)

Maintain trade balance

The baseline 10% tariff on most goods helps reduce the US trade deficit with Australia and other trading partners, encouraging consumption of domestic products over imports. (Source)

Encourage local investment and innovation

Protecting strategic sectors, such as critical minerals and semiconductors, allows US businesses to invest in domestic production and technological innovation without immediate foreign competition. (Source)

Prevent illegal transhipment and enforce origin rules

New tariffs also target goods that are relabelled or rerouted to disguise their origin, particularly products from China transiting through Southeast Asia. Punitive tariffs are being used to enforce supply chain transparency and compliance. (Source)

How can business owners prepare for ongoing tariffs in Australia? 

Ongoing tariffs can affect costs, supply chains, and profitability. Here are practical steps Australian business owners can take to stay ahead:

1. Leverage QuickBooks for cash flow management: Use QuickBooks to track incoming and outgoing payments, monitor cash flow in real time, and identify where tariff-related costs may impact liquidity.
2. Adjust budgets and create forecasts: Update your budgets and cash flow forecasts to account for higher import/export costs. QuickBooks’ reporting tools make it easy to model different scenarios, so you can anticipate the financial impact of tariffs.
3. Assess sourcing providers and costs: Review your supply chain and compare costs from different suppliers. QuickBooks can help you track inventory costs and expenses by vendor, allowing you to identify opportunities to optimise sourcing or negotiate better rates.
4. Keep documentation and run audits: Maintain thorough records of all tariffs, duties, and customs paperwork. QuickBooks allows you to attach invoices and import/export documents directly to transactions, simplifying audits and ensuring compliance with regulations.
5. Analyse product profitability: Use QuickBooks to track the profitability of products affected by tariffs. Understanding which items are most impacted helps you make informed decisions about pricing.
6. Plan for currency and international payment fluctuations: Tariff-related changes can interact with currency shifts. QuickBooks can help you monitor international payments and currency conversions, giving you a clearer picture of costs when trading globally.