The United States will hit almost all Australian imports with a new 10 per cent tariff from April 5, 2025 at 12:01am Eastern Daylight Time.
Businesses exporting directly to the US will be hit hardest by this new development, but the ripple effects will extend across the entire business community, according to Business NSW CEO Daniel Hunter.
“Even businesses not directly exporting to the US will feel the strain through disrupted supply chains and increased operational costs,” Mr Hunter said. “The need to reassess supply chain management and explore alternative export markets is now more critical than ever.”
For instance, some of Australia’s major trading partners – like China and South Korea – now face significantly higher US tariffs (34 and 25 per cent, respectively). If these countries restrict manufacturing as a result, Australia could see lower demand for exports.
While many Australian businesses have already adjusted their supply chains in light of Trump’s “America first” foreign trade policy, they’re not the only ones. Highly-affected countries will also be looking for new places to export – including Australia. This could mean more competition for local business.
“There is a chance the Australian market could be inundated with cheaper Chinese imports, creating intense competition for local businesses and eroding profit margins for SMEs unable to compete on price,” RSM Australia Economist Devika Shivadekar told ISB in January this year.
“At the same time, a weaker Australian dollar, driven by trade uncertainties and a strong US dollar, could see import costs increase for SMEs reliant on foreign raw materials, machinery, or technology – further straining already tight margins,” she added.
You can also expect higher costs across the board, including shipping and manufacturing, says Shippit CEO and Co-Founder Rob Hango-Zada.
“The real disruption isn’t just about trade policy,” he said. “It’s about rising costs, volatile shipping rates, and the need for local retailers to rethink their sourcing and fulfillment strategies before they get priced out of the market.”
In sum, while most small businesses in Australia won’t find themselves directly impacted by the new tariff, your business could feel the effects at some stage. If you haven’t already, now is the time to explore your options when it comes to alternative export markets.
