How recent US trade policy changes are shaking up Australian businesses

Australian businesses that once counted on smooth trade with the US are now faced with a new challenge: tariffs.

In 2025, the US introduced a 10% global baseline tariff on imports. This may result in higher costs and margin pressure for some exporters which may add further strain for some manufacturers and suppliers. This article explores what the tariffs mean for Australian businesses across key sectors, and how small business owners can stay resilient and adapt to the changing trade landscape.

What are the new U.S. tariffs?

In 2025, a new US trade policy was introduced to implement a 10% baseline tariff on imports from nearly all trading partners, including long-time allies such as Australia. This means that a wide range of Australian goods, from food exports to manufactured products, now face higher entry costs into the American market.

Certain markets have been hit even harder. For example, automobiles, truck and truck parts are subject to a 25% tariff. Meanwhile, steel and aluminium imports now face a 50% tariff. Tariff rates and trade measures are subject to change, may vary by product classification, and may not apply uniformly across all goods. This adds more strain to manufacturers and suppliers already juggling high material costs.

Another significant change is the removal of the de minimis exemption, which previously allowed low-value goods to enter the US without duty. Small exporters who relied on selling products under that threshold are now seeing additional costs and customs paperwork for every shipment.

While the Australia–United States Free Trade Agreement (AUSFTA) technically remains in place, these measures may reduce the practical benefits Australian businesses previously experienced under AUSFTA. For Australian businesses, this could mean reassessing pricing strategies, reviewing supplier agreements, and preparing for the reality of higher trade costs in the short term.

The ripple effect on Australian businesses

When export costs jump, businesses must decide whether to absorb the added fees or increase their prices. Both options can squeeze margins and make long-term planning harder, especially for small exporters who rely on predictable costs to stay competitive.

These changes also trigger indirect challenges. Shipping companies are dealing with congestion and rerouting, which leads to slower delivery times across multiple markets. This is resulting in suppliers being pushed to adjust their pricing to cover the increased costs they face. A manufacturer in Australia who buys US components, for example, may suddenly be paying more even if they have never exported a product overseas.

Small businesses without any US customers can still feel the second-hand pressure. A café may find its equipment more expensive because the supplier imports parts affected by tariffs. A builder might see rising material costs linked to steel tariffs. These indirect effects highlight how interconnected supply chains are, and why tariff changes can reshape operations even for businesses that don’t trade outside Australia.

Who’s winning, and who’s hurting

The impact of the new tariffs is affecting various industries in different ways. Some industries are finding small advantages, while others are feeling the pressure almost immediately.

Agriculture

With the US applying new baseline tariffs, products like Australian beef, wine and dairy land in the US at a higher cost. This makes it tougher to compete against local producers, especially in a market where price sensitivity is already high.

Manufacturing

The picture is mixed for manufacturing. Large players may benefit from rising global steel prices, which lift demand for domestically produced materials. But smaller manufacturers could be facing a different story. They rely on imported components or raw materials, many of which are now subject to extra tariff costs. Those higher expenses can erode margins or force price increases that customers resist.

Pharmaceuticals

Pharmaceutical businesses are preparing for possible spikes in tariffs on ingredients or finished products. The US has recently proposed tariffs up to 100% for imported branded or patented drugs, although the policy was ultimately put on pause. However, some Australian pharmaceutical companies already manufacture within the US, which shields them from the potential cost increases.

Logistics and Retail

Importing US goods now comes with higher costs and more pricing uncertainty. Logistics teams must manage longer shipping times and changing import rules, which complicates delivery schedules and inventory control. For small businesses, these challenges can translate into tighter margins and tough decisions around pricing.

What can small businesses do?

While the tariff changes create pressure, Australian small businesses do have options. A few practical adjustments can help protect your margins and strengthen long-term resilience while things evolve.

Reassess pricing and contracts with US buyers: If you sell directly to the US, now might be the time to review your contracts. Build in flexibility for currency changes, tariff-driven costs, and longer shipping times.

Diversify export markets: Relying heavily on one market increases your exposure to trade shocks. Exploring alternative regions in Asia, Europe, or the Middle East may help you spread risk and find new opportunities.

Seek expert advice: Tariff codes and customs rules change quickly. Speaking with a trade advisor, accountant, or customs broker can assist you in understanding your obligations and reducing the risk of errors. Their guidance may also help you spot new opportunities in the current trade environment.

Looking ahead with confidence

Tariffs can feel like a sudden jolt to the system, but Australian businesses have a long history of adjusting, innovating, and finding new paths forward. If you are feeling the pressure from rising costs or shifting supply chains, you are not alone. Many business owners are taking this moment to rethink strategy, explore new markets, and strengthen their risk protection.

Global volatility is a reminder of how interconnected today’s business environment is. Even if you operate locally, you may feel indirect effects through freight providers, wholesalers, or manufacturers. Strengthening your protection now could ease that pressure and help you stay focused on your customers.

Insurance does not address tariff or trade policy risk itself but may help manage certain downstream financial exposures. Whether it is protecting your equipment, your stock, your contracts, or your liability exposure, the right insurance could make a difference when conditions change quickly.

If you decide it is time to revisit your policy options, BizCover makes it easy to compare quotes online and choose cover that supports your business as it grows and adapts. It’s easy, affordable and drama-free.

Any examples used in this article are illustrative only and are not intended to be exhaustive or predictive. They do not represent actual business outcomes and may not apply to every business or industry.