Australia Objects to US Tariff Proposal, Citing Lack of Evidence

The Australian embassy in Washington has lodged an objection to the US's latest tariff proposal, accusing trade investigators of making findings against Australia without producing any credible evidence.

Australian business leaders have meanwhile urged the Trump administration to exclude five categories of imports from the tariff if it ultimately goes ahead.

The US intends to put a 12.5 per cent tariff on Australian products, effectively replacing a 10 per cent tariff that was struck down by the US Supreme Court in February.

The legal basis for the tariff is an investigation into forced labour and slavery, which was launched just after Mr Trump vowed to find ways around the court ruling.

It subsequently found the US's major trading partners had failed to adequately prevent forced labour, and proposed new tariffs across the board.

But Australia this week lodged a formal submission with the US Trade Representative (USTR), arguing 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 a country's efforts to prevent forced labour, had consistently given Australia the best possible rating.

At least treat us same as UK, Australia says

The submission also argues the 12.5 per cent tariff would be unfair compared with other countries, where a smaller tariff is proposed.

The UK, for example, "takes a similar approach to Australia in combating forced labour in supply chains", but would only be hit with a 10 per cent tariff.

A tariff of 10 per cent is also proposed for countries that the Trafficking in Persons Report has rated worse than Australia, including Bangladesh, Cambodia, Malaysia, Pakistan and Indonesia.

The submission, by Australia's acting top trade diplomat in Washington, Erin Kelly, reiterates the government's long-held argument that tariffs violate the US-Australia free trade agreement.

It also says Australia has been working constructively with the US on trade issues, pointing to recently relaxed restrictions on American beef imports, and the critical minerals framework deal signed at the White House last year.

Australian business pushes for exceptions

In a separate submission, the Business Council of Australia put forward similar reasons for opposing the new tariff.

It also said that if the US went ahead with the tariff, it should exempt five types of imports. They include:

products already subject to "national security" trade measures, which include steel and aluminium

products "for which there is no meaningful domestic alternative"

products "supporting resilient supply chains"

products where tariffs would put "disproportionate costs" on US buyers without helping to prevent forced labour

The fifth exemption would be for products designed to help people with disabilities, which are already broadly exempt from tariffs under what is known as the "Nairobi Protocol". The Australian embassy submission makes the same request.

Industry group AusBiotech and Australia-based medical device maker Cochlear lodged their own submissions, also arguing the Nairobi Protocol be maintained.

The office of the USTR has this week been hearing in-person evidence about the tariff proposal from representatives of more than a dozen countries.

Australia is not listed among them. But the Australian government has said Trade Minister Don Farrell reiterated Australia's position during a meeting with US trade ambassador Jamieson Greer in Paris last month.

The USTR says the international community's failure to take stronger action against forced labour has created a "dynamic where American workers are forced to compete globally on an unlevel playing field". But it says a final decision on the proposed tariffs has not yet been made.