• Trans-Pacific freight rates are dropping as US-bound volumes decline.
• Shipping to Australia and Europe is tightening, pushing costs up.
• Q3–Q4 port congestion in Australia is expected due to early holiday bookings.
• Exporters are rerouting via ASEAN and Latin America to avoid tariffs.
• Agile freight partners are now essential to manage shifting supply chains.

Australia and the United States share one of the world’s most robust trade relationships. With over US$77 billion in two-way trade and a staggering US$1.6 trillion in investment links, the US is Australia’s largest economic partner (source). This means US economic and trade policies affect thousands of Australian businesses, especially medium-sized exporters in sectors like retail, medical technology, and agribusiness, which rely on predictable access to the US market.

Thanks to the Trump Tariffs, however, that certainty is now under pressure!

From April 2025, the US began enforcing a 10% baseline tariff on most imported goods. And from August 1st, steeper “reciprocal” tariffs of up to 25% or more will apply to a wide range of products. Australia has been spared from some of the harsher tariffs expected to be rolled out, but it has not escaped unscathed.

See the latest US tariffs for Australia here.

Trump Tariffs – A Blunt Tool with Far-Reaching Impact

The blanket 10% levy imposed on most imports as of 5th April 2025 includes goods from Australia, many of which were previously duty-free under the AUSFTA. This reversion to protectionism has disrupted long-standing expectations.

A limited number of Australian goods will remain exempt, but significant sectors, including beef, wine, and metals, are squarely in the firing line. As outlined by the Department of Foreign Affairs and Trade (DFAT), some items face higher rates, and complexities will only deepen as country-specific reciprocal tariffs are enforced in August (source).

Importantly, this is happening in a global context where exporters from China, Korea, Japan, and Malaysia will be hit with tariffs of 25% or higher (source). For Australian firms, that presents both challenges and opportunities.

Australian Exporters Caught in the Crossfire

Agriculture

The United States remains the largest overseas buyer of Australian beef. In 2024, the US accounted for 30.7% of Australia’s beef exports, up from 17% in 2022, demonstrating its dominant role in export demand (source). However, the introduction of a 10% tariff on Australian beef could start to erode this edge, especially if market competition or exchange rate shifts kick in (source). This means that the sector has avoided more punitive tariffs, which were feared, but that has come at the cost of Australia having to lift restrictions on the import of beef from the US (source).

Australian wine exports to the United States, which reached AUD $325 million in 2024 (the third largest export market by value, behind China and the UK), were also hit by a 10% tariff introduced in April 2025. This marks the first time the export industry lost duty-free access under AUSFTA, though at present its seem to be avoiding any further punitive tariffs (source).

Metals

Steel and aluminium will attract 25% tariffs, echoing past flashpoints in US-Australia trade. While these only made up about 0.2% of exports in 2024, the psychological impact is outsized (source).

Commodities

Australia’s broader export picture is clouded by projections of a 40% drop in iron ore prices by March 2026, driven by slowing demand and geopolitical tension (source). Combined with tariffs, this compounds pressure on margins.

Medium-Sized Enterprises Under Pressure

While large corporations often have dedicated trade teams and deep financial buffers, it is medium-sized Australian exporters who will feel the sharpest sting, particularly in retail, technology and medical equipment. These businesses sit at the strategic midpoint of scale and agility, big enough to trade globally, but small enough that a 10%–25% cost increase can shake profitability.

Retail

An Australian streetwear brand that has achieved international cult status, and has a large US presence, with flagship stores and digital infrastructure tailored to American consumers, has already signalled a shift in strategy. In response to the new tariffs, they have begun inventory realignments and supply chain renegotiations. Recently, they cited “cost pressures from logistics and product sourcing” and confirmed taking action to rebalance origin points and renegotiate vendor contracts to maintain competitiveness in key markets (source).

If US tariffs continue to escalate or expand into finished consumer goods, such retailers may have to consider shifting warehousing or fulfilment closer to the US to minimise total landed costs. These moves carry their own risks and may require intensive deployment of capital.

Medtech

Australian medical technology sector companies are navigating increasingly complex ground realities as well. With the US accounting for a significant portion of sales for such companies, many are facing rising landed costs under the new tariff regime, which could necessitate higher prices for American healthcare providers and suppress demand. (source).

To counteract these pressures, medtech companies are exploring rerouting manufacturing through ASEAN countries or Latin America, aiming to partially reclassify product origins and thus avoid direct US tariffs. However, these alternative supply chains are not without obstacles, particularly heightened anti-circumvention enforcement by US Customs, which is scrutinising rerouted goods more closely. With supply chains being disrupted by sweeping new tariffs, such companies are being forced to rethink manufacturing footprints and material sourcing (source).

Technology

While digital services and software remain tariff-exempt, any physical equipment (such as IoT devices, medical imaging consoles, wearable health trackers, etc…) now faces 10% baseline import duties, rising to more depending on components and country of assembly.

Given that many of these firms rely on complex multinational supply chains, the tariff’s impact is not just on finished goods but also on inputs, which may be sourced from countries facing even harsher tariffs; such as China, presently at 30%, though higher tariffs could come by November, although there is much hope for talks and settlement in this regard (source). For Australian firms, this introduces uncertainty not only in exporting to the US, but in sourcing parts for domestic manufacturing in the first place.

Broader Implications

According to our analysis, in all three sectors, the risk is the same; if Australian mid-market exporters cannot adapt quickly, market share in the US could shrink, and fixed operational costs may be spread over fewer units, squeezing profitability. At the same time, this opens the door for more agile competitors from lower-cost economies, particularly those not facing the same tariff structure.

For firms who can respond with pricing agility, production flexibility, and the right freight partners, there is room to navigate. But the margin for error is narrower than ever.

Ripple Effects on Supply Chains

Declining Asian Volumes = Shipping Rate Drop

As US tariffs above 25% on Chinese, Korean, Japanese, and Malaysian goods take hold, trans-pacific cargo volumes are already contracting. According to The Journal of Commerce, eastbound trans-pacific spot rates are now “in rapid retreat”, reflecting diminished demand since the tariff surge (source). Similarly, recent data from Sea-Intelligence shows that in early May 2025, scheduled blank capacity on the Asia–North America West Coast route leapt from 13% in one week to 28% the next, signalling carriers actively dialling down capacity (source). On the East Coast, conditions were even more dramatic, rising from 0% to 35%, then to 42% in just two weeks (source). Collectively, these factors are nudging container rates lower on key pacific routes.

Redirection to Europe & Australia = Freight Inflation

With US demand weakening, many Asian exporters are redirecting shipments to Europe, Australia, and Latin America. This shift is clashing with existing capacity constraints; Drewry’s World Container Index fell 2.6 percent to US$2,602 per 40-ft container during the week of July 17th, marking the 5th straight weekly decline (source). Still, that modest dip masks sharp divergences elsewhere; Asia-Europe routes remain overheated, with spot rates reported around US$3,500 per 40-ft container in July (source).

In Australia, the increased inbound volume during Q3 is likely to tighten capacity at local ports, pushing freight rates up for importers, while providing opportunities for responsive logistics operators.

Holiday Crunch Looms

The upcoming Q3-Q4 shipping window, critical for Black Friday, Christmas, and Lunar New Year goods, is shaping up as a logistical challenge. The combination of thinning US volumes and spiking redirection to other regions could lead to advanced bookings, port congestion, and tight schedules. The Loadstar has already flagged rising booking volumes to Australian and European ports as companies seek to secure space early (source).

For Australian retailers, this may mean paying premiums for timely deliveries or potentially enduring delays during a peak-critical sales period.

Strategic Refocus for Australian Exporters

These disruptions underscore a clear message: business as usual won’t suffice. Many exporters are already pivoting toward Canada, the UK, India, and Southeast Asia, leveraging existing FTAs and demand-driven growth in these markets. DFAT reports that ASEAN’s appetite for Australian agriproducts is expanding, with agricultural exports to the region increasing from 22% to 27% of total agri-exports in 2022 (source, source).

Australian exporters who diversify product pipelines, negotiate flexible freight arrangements, and establish new logistics corridors now will thus not only buffer against US volatility but may also emerge stronger in a realigned trade landscape.

A Shift in Strategy

Canberra’s Response

Australia has filed a formal complaint at the WTO, citing trade rule violations (source). However, there has been no retaliatory tariff response, likely to preserve long-term strategic ties. Meanwhile, behind the scenes, the federal government is accelerating Free Trade Agreement negotiations with ASEAN, India, and the UK to cushion the blow.

Business Response

Exporters are responding with speed:

• Agribusiness players are shifting into premium categories where higher margins can absorb tariff impacts.
• Tech and education providers, relatively insulated from goods tariffs, are ramping up expansion.
• Medical device firms are exploring processing hubs in Southeast Asia, allowing partial reclassification of origin to reduce tariff exposure.

But all of this depends on agility, and that agility relies on logistics partners being aligned with business strategy.

The Freight Forwarding Factor – Why It Matters Now More Than Ever

With complex tariffs, rerouted supply chains, and time-critical deliveries, choosing the right freight partner is now a strategy decision.

Reduced volumes to the US are already threatening shipping economies of scale in Australia. In turn, this could shrink domestic production in export-reliant sectors and inflate prices at home.

Medium-sized businesses in particular, which don’t have billion-dollar hedging operations or in-house trade teams, will be hit the hardest. Therefore, such firms need partners who are nimble, communicative, and deeply familiar with the new freight dynamics.

At Nexus Logix, we understand the urgency and complexity of these changes. With decades of experience, global reach, and a proudly Australian, customer-first approach, we move your cargo, your reputation, and your aspirations. We stand out with our personalised services and ensure a responsive experience so you always know where your shipment is and when it will arrive. Our scalable logistics solutions can also help you to manage your supply chains more efficiently.

Talk to us today about how we can help your business adapt, compete, and thrive in a reshaped global trade landscape.