US tariffs could create a ‘conflict of laws’ for Australian businesses

The Trump administration has proposed a 12.5 per cent tariff on Australian imports as part of an escalating US trade enforcement strategy against countries allegedly failing to take action to prevent forced labour within global supply chains. An RMIT expert explains that if Australia meets the US's trade ban tariffs, this could create a 'conflict of laws' for Australian businesses sourcing from China.

Professor Shelley Marshall, School of Law:

"Australia's disclosure-only model under the Modern Slavery Act is no longer just an internal regulatory issue, it has evolved into a tangible economic liability.

"For years, civil society groups and human rights advocates have warned that relying on large corporations to publish annual transparency statements fails to stop slave-made goods from entering domestic markets.

"This tariff proposal means that transparency without border-level enforcement will carry significant commercial consequences.

"However, if Australia introduces a border-level import ban to mitigate the 12.5 per cent US tariff, domestic entities will face contradictory legal mandates from their primary security ally, the US, and their principal trading partner, China.

"This means that Australian businesses could face a direct conflict of laws.

"Implementing a strict border ban to avoid US tariffs risks triggering Chinese counter-sanctions, including local contract lawsuits, asset freezes, or executive exit bans because China has recently passed Supply Chain Security and Counter-Extraterritoriality Regulations to counter EU and US forced labour trade bans and human rights due diligence laws. Navigating this environment requires a highly calculated strategy."

Shelley Marshall is Deputy Dean (Research and Innovation) at the School of Law at RMIT University. Her work spans business, human rights and international labour law.

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