International trade, particularly Australia imports, is very important to the country’s economy. This not only allows Australians to pay less for products exported into the country but it also allows businesses importing to other countries to profit from an expanded market.
However, there are certain limitations to Australian imports entering the premises of other countries, particularly that of China, Japan and the USA. What are these restrictions? Until when will these restrictions be imposed?
Tariffs on Australia imports
Also referred to as import duties, tariffs are calculated as a percentage of the value of a given imported product such as the illustration below:
Australia imports and tariffs explained
This is imposed to promote domestic products that are vulnerable to foreign competition. It levels the playing field as it also discourages imports by making these goods more expensive than domestically produced items.
Import quotas on Australian products
The law of supply and demand makes products with lesser quantity to become more expensive. In implementing import quotas, the prices of imported goods become higher compared to local produce.
Beware of Australia import quotas
Other import restrictions can also be implemented, including currency restrictions and embargoes; but for this article; we shall only be focusing on the various tariff rates and quotas implemented by the top 3 trading partners of Australia – China, Japan and the USA.
Australia imports to US, China and Japan
Imposed tariff rates and quotas of China on the following Australian imports
The China Australia Free Trade Agreement (CHAFTA) came into force on 20 December 2015. This was agreed upon by the two countries after 10 years of negotiations. However tariff rates and quotas remain the same for some of the commodities imported into China. It includes the following:
Australia imports on sugar – 50% tariff rate
Sugar is one of the major Australian imports of China. In the year 2015 alone, it imported US$314 million worth of products under this HS Code, which is 72.2% higher compared to 2014’s import of only US$183 million.
However, amidst the ratification of ChAFTA, the tariff rates of sugar remains to be at 50%.
Australia imports on wool – 38% tariff rate exceeding the quota limit
Prior to the China-Australia Free Trade Agreement (ChAFTA) the tariff for this wool was at 38%, but beginning 1 January 2016, a duty-free annual tariff rate quota (TRQ) has been implemented which amounts to 30,000 metric tonnes up to 44,324 on 1 January 2024. The table below shows this in detail.
Australia imports quota on wool via ChAFTA
Australia imports on cotton – 40% tariff rate
Cotton is another major item exported into China from Australia. In 2015, over US$3 billion worth of products were imported from Australia, which is 48.6% lower compared to 2014’s US$5 billion.
With ChAFTA still implementing the base rate tariff of 40%, it is unlikely that export of this item into China would be increasing.
Australia imports on wheat – 65% tariff rate
Wheat is another agricultural product Australia would like to export to China at a reduced, if not zero tariff rate. However, even with ChAFTA coming into force, the tariff rate for this product remains to be at 65%.
This very high tariff rate may also be the reason why we see a decline of imported wheat into China. In 2015, we saw a decrease of 5.7% of exports bringing the value from US$15 million to just US$15 million.
Australia imports on maize – 20% tariff rate
Australian corn manufacturers suffers the same fate with ChAFTA as tariff for their product remains at a base rate of 20%. This saw a decline of export from US$6 million in 2014 to just US$4 million for 2015.
Australia imports on caanola – 9% tariff rate
Exporters of canola oil into China is also unhappy with ChAFTA as we see their export rate going down 16%, which is at US$773 million in 2014 but only $US649 in 2015.
Could this improve over time? Maybe, but with a tariff rate of 9%, it may unlikely be the case.
Australia imports and Chinese tariff rates for major agricultural products
Imposed Tariff Rates of Japan on Australian Imports
The Japan-Australia Economic Partnership Agreement (JAEPA) is set to deliver substantial benefits to the economy of Australia. But let’s take a look at how some of the tariff imports and quotas have changed due to the ratification of this agreement.
Rice, Barley and wheat
As of the moment, rice, barley and wheat remains to be governed under the Japanese Government’s Article 42 of “The Law for Stabilization of Supply-Demand and Price of Staple Food”. Thus this remains subject to their discretion.
The Law for Stabilization of Supply-Demand and Price of Staple Food
Sugar remains to be excluded from any tariff commitments even under JAEPA. However pls refer to this link for sugar products under HS CODE 1701.14.200
Beef scheduled tariff rate under JAEPA
The JAEPA gave a boost to the Australian beef industry as it promises a gradual decrease of tariff rate which reduces it from the base rate of 38.5% to just 23.5% on 1 April 2028. Please refer to the chart below for the complete schedule.
Australia imports of beef scheduled tariff under JAEPA
Further, it promises a cut o Japanese beef tariffs, either frozen (tariff rate drop to 19.5%), chilled or fresh (tariff rate drop to 23.5%) within 15 years. Given these tariff cuts, it is expected to boost Australian export by as much as $5.4 billion over 20 years.
Pork – tariff rate reduced to 8% for above import quota
Exporters of pork to Japan, particularly sausages and similar products, of meat, meat offal or blood, food preparations based on these products, also rejoiced with news of a tariff rate reduction of 8% from the current base rate of 10% for port imports exceeding the quota rate.
The table below shows full details.
Australia imports of pork under JAEPA
Imposed tariff rates of USA on goods from Australia
The Australia-US Free Trade Agreement (AUSFTA) is one of the earliest bilateral free trade agreements which entered into effect on 1 January 2005. This gave leverage to Australia to export various goods into the USA. However, amidst AUSFTA taking into effect for more than 20 years, there are still some goods that still require tariff and adhere to import quota requirements.
Beef Australia imports quota
Thanks to the AUSFTA, Australia was given an additional quota access to of 378,214 tons. It also allowed supplemental duty-free access of 15,000 tons in its second year after the enactment and another 5,000 tons added annually or biannually.
Further, an additional quota with a reduced rate of 21% also allows 3,500 tons in the first year which rises to 7,000 tons in the year 2022. At this point, the total-duty free quota beef import access is at 418, 214 tons, with a further 4,000 tons at reduced-duty.
By the year 2023, Australia will be enjoying an unlimited duty-free access to beef. The below table shows the details:
Australia imports beef arrangements via AUSFTA
Dairy Australia imports quota
Amidst the current AUSFTA, there has been no change to the above-quota tariff of dairy products. Increased imports from Australia will amount do about 0.17% of the annual value of the U.S. dairy production and just 2% of the current value of the total US dairy imports.
The below data explains it:
Australia imports dairy arrangements via AUSFTA
Sugar Australia imports quota
Similar with dairy products, the quota access for sugar remains unchanged. It is still at 87,402 metric tons based on the Uruguay Round Agreements between the two countries.
Tobacco and cotton import quota and tariff rates
Tobacco have new import quota which starts at 250 tonnes in a year and growing by an additional three percent in subsequent years. Further, over-quota tariff rates are to be eliminated after 18 years, which means that these items can now go freely enter Australia.
Peanuts import quota and tariff rates
As for peanuts and peanut products, it will adapt the same tobacco and cotton tariff quota but the volume difference is different. The quota volume for year one was at 500 tonnes rather than the 250 tonnes implemented for tobacco and cotton.
Avocados tariff rates
There were two seasonal duty free tariff rate quotas for Australian avocados imported into the United States. During the 2nd year of the AUSFTA, 1,500 tonnes may enter the USA but between the 16th of September and 31st of January and 2,500 tonnes of Australian avocados into the USA. In total, there are 4,000 tonnes that can enter the USA which will grow by an additional 10% each year. But since the over-quota tariff is to be eliminated over a period of 18 years, avocados imported into the USA are already duty free.
Given these various tariff rates and quotas that exist amidst existing bilateral agreements of Australia with China, USA and Japan. However, exporting items into China, Japan and the USA is really complex. You’ll need help from an expert brokerage team for your exported items. Contact us,today.