The US has confirmed a 12.5 per cent tariff will come into force on Australian exports from Friday afternoon (AEST), replacing the existing 10 per cent baseline levy that expires at the same time.
Tariffs are being imposed on 60 economies in total for what the Trump administration claims is in response for their failure to effectively enforce a prohibition on the importation of goods produced with forced labour.
"The Albanese government believes that this imposition of higher tariffs on Australia is completely unjustified and we will continue to lobby the United States trade representative to remove all tariffs on Australian goods," Trade Minister Don Farrell said.
"We believe that amongst all of the countries in the world, Australia does take the issue of modern slavery seriously and will continue to to do that."
The response comes after a US trade representative defended the administration's latest levies.
"President Trump recognises that decades of moral suasion have not eradicated forced labour from global supply chains," the representative said in a statement.
"The United States has had a forced-labour import ban for nearly a century, and rigorously enforces it; it's well past time for our trading partners to do the same."
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the decision was "ludicrous" and the US had again cast aside its free-trade agreement obligations with Australia.
"What makes it even more unjustified is the fact the US is imposing these tariffs on the basis of forced labour or modern slavery," he said.
"Australia has some of the highest protections and enforcement against modern slavery anywhere in the world."
The National Farmers' Federation said it was deeply disappointed in Washington's decision.
"Rather than moving back towards the free and fair trading arrangements that have served both our countries well for two decades, the United States has chosen to further increase barriers to trade, despite Australia's longstanding record of high standards and responsible trade," chief executive Michael Guerin said.
Senator Farrell confirmed exemptions would remain on some of the largest exports to the US, including beef, gold and copper.
"We will continue to have a high volume of trade into the United States, but we're always looking for new markets," he said.
The trade minister pointed to the government's diversification of Australia's trade relationships, having struck new deals with the UAE, the European Union and India.
Australian trade reached a record figure of $1.32 trillion in 2025, he added.
Earlier in July, the federal government announced it would strengthen anti-slavery laws with harsher penalties.
Under new changes, companies with an annual revenue of more than $100 million will be subject to a new criminal offence in addition to a new civil penalty that will be added to the existing Modern Slavery Act, which was last updated in 2018.
An estimated 50 million people across the world are enslaved, according to the Global Slavery Index.
This includes people who are trafficked and subject to forced labour.
