Australia has formally requested the United States to reconsider recent changes to tariffs on low-value packages, which have adversely affected at least 3,000 local businesses and disrupted international mail services. On March 15, 2024, Trade Minister Don Farrell communicated with Jennifer Thornton, the general counsel to the US Trade Representative, regarding the decision made by the Trump administration to impose tariffs on all packages valued between USD 100 and USD 800 (approximately AUD 155 to AUD 1,230).
The new tariffs, effective from August 29, have led postal services worldwide, including Australia Post, to suspend small-package mail to the US while they navigate the new regulations, which were disclosed less than two weeks prior. Australia Post is currently in negotiations with the American trade IT company Zonos to establish a payment processing system that will facilitate the collection of tariffs paid by American consumers on Australian goods.
Under the revised tariff regime, while Australian goods incur a 10 percent tariff upon entry into the US, items within the USD 100 to USD 800 range will be subject to a flat fee of USD 80. Farrell emphasized that such tariffs not only elevate consumer prices but could also lead to increased unemployment. He asserted that the Australian government continues to advocate against these tariffs, arguing they are not beneficial for the US economy.
“We’ve said to the Americans, look, firstly, we don’t agree with what you’ve done, but if you’re going to do it, then you’ve got to do it in a way that people can comply with,” Farrell stated. “These operators were given less than a month to make changes to get their product into the United States.” He expressed hope that ongoing discussions would resolve the issue, allowing Australian products to continue reaching US consumers.
One business directly impacted by this tariff upheaval is Mediband, a Sydney-based company that supplies medical ID bracelets. The company has been servicing clients such as Boston Children’s Hospital and LA County Hospital since 2004. Managing Director Michael Randall highlighted that the US market constitutes about 30 percent of Mediband’s sales. Due to the current uncertainty, he has ceased shipments to the US and removed it from the list of countries to which they deliver.
Randall noted that the company has approximately 50 orders that will be fulfilled, but until the tariff situation is resolved, new orders from American customers will not be accepted. He expressed concern for vulnerable patients in the US who rely on their products for critical medical identification. “We accept the shift in US tariff policy. But the way this has been handled – suspending shipments without warning – means real people with serious conditions are suddenly left exposed,” he remarked.
The sudden changes have also affected postal services in other countries, with agencies like Britain’s Royal Mail and Germany’s Deutsche Post halting shipments to the US. This has placed immense pressure on Zonos, the only two IT companies authorized in the US to manage the new tariff payment system. Clint Reid, head of Zonos, shared on social media the overwhelming demand for their services, indicating the strain on their operations.
Former US presidential candidate Hillary Clinton criticized the situation, noting that the tariff changes have led multiple countries, including Australia, New Zealand, India, Germany, France, and Spain, to suspend package deliveries to the US. She expressed her discontent on social media, questioning whether anyone voted in 2024 to become a “new Hermit Kingdom,” a term often associated with North Korea.
Economist Shane Oliver from AMP commented that while the small-package tariff changes are relatively minor compared to other recent tariff announcements from the Trump administration, they add another layer of complexity for small businesses. “This is just another piece of sand thrown into the cogs of the global trading system, which is just going to slow it down,” he stated.
Andrew McKellar, Chief Executive Officer of the Australian Chamber of Commerce and Industry, confirmed that numerous members with substantial US customer bases have been directly affected by the new policies. He assured that efforts to implement a solution are progressing as swiftly as possible.
As the situation evolves, Australian businesses and consumers await further developments, hoping for a resolution that will restore normalcy to their trade relations with the United States.
