For Australian people professionals,this is a direct challenge to how organisations manage procurement, sourcing and supply chain risk
The Trump administration has proposed a 12.5 per cent tariff on Australian imports as part of a sweeping Section 301 investigation into forced labour, naming Australia among 60 economies it found to have failed to adequately prohibit goods made through modern slavery from entering their markets. The announcement, made by the US Trade Representative (USTR) on 2 June, has drawn a sharp rebuke from the Albanese government — and placed supply chain ethics squarely on the agenda for Australian people professionals.
For those who assumed modern slavery compliance was largely an exercise in annual reporting, Washington's move should serve as a warning. The USTR's finding was explicit: Australia's "acts, policies and practices" related to its failure to enforce a forced labour import prohibition are "unreasonable and burden or restrict US commerce." In plain terms, the US is treating inadequate slavery controls as an unfair trade practice — and Australia's exports are now paying a price for it.
"The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable," said Jamieson Greer, US Trade Rrepresentative.
Australia's Trade Minister Don Farrell rejected the finding, with a spokesperson stating that "Australia maintains our position that any tariffs on Australian exports to the United States are unjustified and inconsistent with our free trade agreement" and that Australia "has robust, comprehensive and world-leading legislation addressing forced labour and modern slavery." The government has until 6 July to submit public comments, with a formal hearing scheduled for 7 July.
Why this matters beyond trade policy
The tariff lands in the middle of an already uncomfortable conversation about how seriously Australian businesses are taking their modern slavery obligations. Modelling from supply chain risk platform Fair Supply has estimated that more than 21 per cent of all goods imported into Australia in the last financial year — roughly one dollar in every five spent on imports — were linked to supply chains where coercion, debt bondage, or other forms of modern slavery are known to occur. That figure was cited by Australia's own anti-slavery commissioner Chris Evans in January, when he warned that Australia risked becoming a dumping ground for goods banned elsewhere on forced labour grounds.
The timing is also awkward domestically. A powerful coalition of over 100 investors, businesses, unions, civil society organisations and survivor advocates has been calling on the federal government to introduce mandatory human rights due diligence requirements for large companies — moving the law's focus from reporting to action. The UN Committee on Economic, Social and Cultural Rights made a similar call in March, urging Australia to introduce mandatory due diligence under the Modern Slavery Act and report back within 24 months.
What HR professionals need to understand now
The Modern Slavery Act 2018 currently requires organisations with annual consolidated revenue above $100 million to submit annual modern slavery statements. However, the Act still lacks enforceable penalties for non-compliance, and critics have long argued that reporting obligations alone do not translate into action. The government opened public submissions on strengthening the Act in July 2025, with potential reforms including civil penalties, mandatory due diligence obligations and expanded disclosure requirements — but legislation has not yet followed.
As HRD Australia has reported, Australia's hidden exploitation crisis is one that HR professionals cannot afford to ignore. Between July 2024 and June 2025, the Australian Federal Police received 371 reports of alleged modern slavery — an average of 31 per month — with agriculture, horticulture, forestry and labour hire among the sectors of concern. For people professionals, that is not a distant statistic. It sits inside procurement decisions, labour hire arrangements, and supplier contracts that HR teams influence every day.
The issue extends into recruitment. HRD Australia has also reported that over 1,000 hirers in Australia have been banned from platforms for high-risk indicators of exploitation, reflecting growing scrutiny of recruitment practices and the channels through which workers are engaged. Deceptive job offers, visa-linked coercion and debt bondage are not confined to overseas supply chains — they show up in domestic labour markets too.
Meanwhile, HRD Australia's reporting on ethical and strategic concerns within Australia's Pacific Australia Labour Mobility scheme has highlighted how sponsored worker arrangements can carry modern slavery risks that fall squarely within HR's reporting obligations — and ethical responsibilities.
The practical ask for people professionals
Whatever the outcome of the tariff negotiations, the trajectory is clear. Trading partners, investors, regulators and civil society are all moving in the same direction: away from disclosure as a destination and towards accountability as a standard. Organisations that have treated their modern slavery statement as an annual compliance exercise are increasingly exposed — commercially, reputationally, and, as tougher laws take shape, legally.
For HR and people teams, the immediate priorities are to audit supplier and labour hire relationships for forced labour indicators, ensure whistleblowing and grievance mechanisms are genuinely accessible to vulnerable workers, and engage procurement colleagues in mapping supply chain risk against the goods and sectors flagged by both the USTR's investigation and Australia's own anti-slavery commissioner. The July hearing deadline is a useful forcing function. Whether or not the tariff ultimately proceeds, the standards it reflects are not going away.
