Homegrown consumer brands are rushing to adjust to US President Donald Trump’s “reciprocal” 10% tariffs on imported Australian products, which threaten growth in a lucrative global market.
Overnight, Trump confirmed a new flat tariff on goods imported from Australia, with government authorities set to collect duties from April 5.
Australia is one of dozens of nations hit with new tariffs, as the Trump administration wages a trade war against allies and trading partners it accuses of undermining the US economy and local manufacturers.
The move is already challenging Australian brands with wholesale and direct-to-consumer operations in the United States.
Steve Rowley is CEO of successful body scrub and skincare brand Frank Body, which sees between 30% and 35% of its global sales originate from North America.
The business currently manufactures its products in Melbourne, Australia, but has previously made some product lines in the US.
“We might need to bring that into consideration again,” said Rowley.
It would add further costs and logistical complexity, “but ultimately, we can run the numbers and look at what the most viable option is for us moving forward,” he continued.
“A 10% tariff is still a tariff, and there’s still going to be impacts on us there, however, is it enough for us to overhaul our supply chain?
“I’m not too sure it is, on first blush.”
Changing unit costs is not off the table.
Frank Body, which recently adjusted its pricing, could consider the cost of the tariffs along with increasing manufacturing costs in a future price tweak.
The tariffs could have a broader effect on American household budgets, Rowley said, making it harder for discretionary brands like Frank Body to reach US consumers.
“It’s such a historically strong consumer group over there, which has always found a way to indulge in the products that they are seeking,” said Rowley.
However, “it does feel like they have been weakening”.
Rowley pointed to a recent market update from major American skincare and beauty retailer Ulta, which carries Frank Body products, showing a sales downturn in recent months.
The tariffs will also rattle the Australian wine export market, which according to Wine Australia, was worth $325 million in the 12 months to December 2024.
The announcement comes almost exactly a year after China lifted its devastating tariffs on Australian wine, an impost that forced exporters to consider growth in alternative markets like the US.
But local producers are in a somewhat favourable position compared to wine export markets like the EU, which faces a 20% tariff on exported beverages, or South Africa, which faces a 30% tariff.
Con-Greg Grigoriou, founder of Delinquente Wine Co. and fourth-generation producer in South Australia’s Riverland wine region, told SmartCompany the tariffs will have a larger effect on French, Italian, and Spanish wines than Australian drop.
“The 10% tariff could be worse, and there are examples of it being worse,” he said.
Promising USD-AUD currency conversion rates have also favoured local producers hawking their wares in the US over recent months.
Even so, Grigoriou said they “might have to have” a discussion with Delinquente Wine Co.’s American import partners about pricing, to maintain competitive with US-produced wines.
Like Rowley, Grigoriou said the seismic effect on US household budgets is a lingering concern.
“I’m more interested and worried about the effects of tariffs in general on the US economy and on consumers’ purchasing power,” he said.
As Australian producers adjust to the new trading restrictions, the federal government appears unlikely to level its own retaliatory tariffs on US products.
Speaking in Melbourne on Thursday morning, Prime Minister Anthony Albanese said Australia “will not join a race to the bottom that leads to higher prices and slower growth”.
Instead, the Prime Minister proposed five countermeasures, including:
In the recent 2025-26 federal budget, the government also committed $20 million to its Buy Australian Plan, encouraging local consumers to choose Australian goods and services.
Earlier, Trade Minister Don Farrell said American tariffs on Australian goods make “absolutely no economic sense”.
“That’s the argument we’re going to be putting, and we’re going to continue to put it until the Americans realise that they are heading down the wrong path here,” he said last month.
Austrade on Thursday updated its Go Global Toolkit to provide further information on the tariffs, and has scheduled a public webinar for 11am on April 9 to address further industry concerns.
SmartCompany understands Austrade officials are working through the finer details of the new tariffs, and will consult with industry groups to hear how they are affecting local exporters.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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