Australian trade officials have warned further US tariffs on pharmaceutical and digital services as well as other sectors could be on the horizon in the wake of America’s recent “slave labour” levy.
US Trade Representative Jamieson Greer announced the sweeping proposal to slap a new impost — known as “section 301” tariffs — on 60 major trading partners on Tuesday, following an investigation into forced labour and modern slavery practice.
The 92-page report alleges that nations — including Australia, Canada, Mexico, Britain and the European Union — are importing goods into the country made with forced labour.
The Trump administration claims the tariffs of between 10 and 12.5 per cent could prevent the practice which “burdens or restricts US commerce” but the timing of the tariffs has been questioned.
It has been widely seen as a response to the US Supreme Court ruling in February that Donald Trump’s Liberation Day tariffs were illegal.
Department of Foreign Affairs and Trade’s George Mina revealed in Senate Estimates on Friday that Australian officials were aware new tariffs could be on the way almost immediately after the court outcome.
He said the department had received “clear indications” from US authorities it would be incoming, insisting it was “not entirely a surprise” but also warning there “might be others”.
“It was very clear. It’s fair to say that the United States had been not only preparing but signalling its preparedness to move to alternative legal authorities for some time,” Mr Mina said.
“What was speculated about at the time, was the use of the Section 301 power on unfair trade practices. What had not become especially explicit was the nature and the coverage of those investigations.
“We still have potential 301 investigations in prospect. We know of two: One on forced labour and one on excess capacity, and we are subject to one of the two.
“There is speculation, of course, at the moment that there might be others.”
Mr Mina said digital and pharmaceutical sectors could be the targets of a new tariff regime.
Foreign Affairs Minister Penny Wong on Friday reiterated that the Government’s stance was “unwarranted and unjustified” given Australia’s “robust counter-slavery framework”.
Mr Greer had labelled the “failure” by trading partners to address ethical goods importation as “unacceptable” and that America would “no longer tolerate this disparity”.
“Some trading partners have taken initial steps to prevent the importation of forced labour goods. However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labour globally,” he said.
His report labelled Canada a “dumping ground” for “re-exports of forced labour products barred from entry to the United States”.
Of Australia, Mr Greer’s report said: “The results of this investigation indicate that the acts, policies and practices of Australia related to the failure to impose and effectively enforce a forced labour import prohibition are unreasonable and burden or restrict US commerce.”
A US trade court last month also found a further 10 per cent across-the-board tariffs imposed by the President were unlawful but the matter remains in an appeals process.
Previous pharmaceutical tariff threats from the US have rattled the Australian health sector, which has warned any increase could jeopardise access to affordable medicines.
Australia exported $2.1 billion of medicinal and pharmaceutical products to the USA last year, of which 87 per cent was blood products.
And in 2024, the US was the second largest trading partner for Australian goods imports and fifth for exports.
Trade Minister Don Farrell met with Mr Greer on the sidelines of the Council of Foreign Relations meeting of trade and foreign ministers in Paris on Wednesday.
Mr Farrell insisted, in an exclusive interview with The Nightly, that while he wanted the tariffs lifted, they wouldn’t have a significant impact and could even deliver a “surprise windfall” on the nation, by making Australian exports more competitive.
“Now, you might say, well, how is that possible they’ve imposed tariffs on us? How was it that we could be increasing our trade? The answer to that is that on Liberation Day, Australia was given the lowest tariff of any country in the world,” Mr Farrell said.
“Our competitors all had higher tariffs. So, in a competitive situation, our imports were cheaper.”
Mr Greer’s investigation was launched on March 12, just weeks after the US Court ruled against the previous trade tariffs on February 20.
The US government has opened the proposal up to public hearings until June 22, with written submission due by July 6.
Mr Mina said Australia was yet to receive formal advice from the US over its intentions but would be monitoring the developments.
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