US tariffs - impacts for Australian logistics professionals

The US has declared a 10% tariff on imports of Australian products. This will affect professionals who support exporters of Australian goods.

What has been announced

A 10% tariff on Australian goods will begin on 5 April (US Eastern time). This is regardless of the Australia US free trade agreement.

Goods that were loaded at their port of loading and in their final form of transport prior to 5 April will not be impacted.

Many countries, including China, the EU, India, Indonesia, Japan, Vietnam and South Korea were subject to higher tariffs. Those higher tariffs come into effect on 9 April 2025.

There are exceptions, being:

• goods subject to higher tariffs - steel, aluminium and automotive goods

• certain energy related goods, pharmaceuticals, timber and paper goods, precious metals and semiconductors - there is a 37 page list of exempt HS codes

• goods that are under the US$800 per consignment de minimis exception (although this will be removed when duty collection procedures are implemented)

• the US content in goods where this content is above 20% and other requirements have been met

Beware of circumvention

When tariffs on goods from a particular country rise, non-compliant exporters may choose to ship goods via a lower tariff country and claim that the goods were made in that country. Australia has the lowest tariff rate for the US at 10%. Many Oceania and Asian countries have much higher tariff rates. In some cases there will be a financial motivation to ship the goods via Australia and falsely claim Australian origin.

• Beware of newly registered ABNs for an "Australian manufacturer".

• Require proof of Australian origin.

• Understand what requirements must be met before a good can claim to be of Australian origin.

Customs valuation

When duty rates rise, so do methods to try reduce the customs value. It will be up to the US customs broker to declare the value, but they may do so based on the information provided by you or your client. Be careful of:

• the making of payments to the supplier that are not included in the invoice price of the goods

• understand what royalty payments and production assists need to be included in the US customs value

• require proof of payment

• be especially careful of shipments with a value of less than US$800

• customs value is based on the FOB value - only deduct freight and insurance if the supplier is responsible for these costs and they are included in the invoice value

Expect more US due diligence

US importers will want to ensure compliance given they are most likely to be liable for additional duties or face penalties. You may experience the following:

• requests for evidence that the goods originated in Australia

• explanation of the HS code on the export declaration or invoice

• evidence of amounts paid for freight and insurance

• a request for a change in shipping terms (be careful where the supply is changed to DDP terms)

Be careful

It is important to act as if you will be liable for incorrect information. You could be liable in the following ways:

• you provide incorrect advice to your client - don't feel pressured to advise on US customs law. Refer your clients to US based advisors

• you include incorrect statements in an export declaration - the ABF can penalise for false statements

• you assist in evasion of US duties - US authorities are more willing to pursue all parties, regardless of location

  
  

Evolving circumstances present logistics professionals with chances to showcase their importance in the supply chain. Staying informed, enhancing due diligence, and referring clients to specialists when necessary are crucial. By being attentive to potential avoidance strategies, you can assist your clients without, ideally, escalating risks for yourself.

CGT Law are customs and international trade specialist. Please contact Russell Wiese at rwiese@cgtlaw.com.au for further assistance.