Understanding the scope of the new duties

The recent changes to import duties have introduced a complex and far-reaching set of tariffs that are impacting a wide range of industries across Australia. Unlike previous adjustments that targeted specific sectors or product categories, these new duties apply more broadly, affecting everything from textiles and electronics to automotive components and consumer goods. The Australian government has cited the need to protect domestic industries and respond to shifting global trade dynamics as key drivers behind the policy shift.

For many businesses, the immediate impact has been a sharp increase in landed costs, with some importers reporting duty hikes of up to 25 percent on previously exempt goods. This has created significant pricing pressure, particularly for small to medium enterprises that operate on tight margins and rely heavily on imported materials or finished products. The lack of advance notice and clarity around the implementation timeline has only added to the confusion, leaving many scrambling to reassess their cost structures and pricing strategies.

Compounding the challenge is the inconsistency in how the duties are being applied. Some importers have found that similar products are being classified differently at customs, leading to unpredictable duty assessments. This has prompted calls for greater transparency and standardisation in the classification process, as well as clearer guidance from the Australian Border Force and the Department of Home Affairs.

In addition to the direct financial burden, the new duties are also affecting contractual relationships with overseas suppliers. Many Australian businesses are now renegotiating terms to account for the increased costs, while others are exploring alternative sourcing options to mitigate the impact. The ripple effects are being felt throughout the supply chain, with logistics providers, wholesalers and retailers all needing to adjust their operations in response to the new trade environment.

Understanding the full scope of these duties is essential for businesses to make informed decisions. This includes not only identifying which products are affected, but also analysing how the changes interact with existing free trade agreements, preferential tariff schemes and rules of origin. For example, goods imported from countries outside of Australia’s key trade partners may now face significantly higher duties, making it more critical than ever to evaluate the origin and classification of every shipment.

As the regulatory landscape continues to evolve, staying informed and proactive will be key. Businesses must invest time and resources into understanding the nuances of the new duties, engaging with trade experts, and leveraging available government resources to ensure compliance and minimise disruption.

Strategic shifts in sourcing and supply chains

In response to the sweeping changes in import duties, many Australian businesses are rethinking their sourcing strategies and supply chain configurations. The traditional reliance on a narrow set of overseas suppliers—often chosen for cost efficiency—is being replaced by a more diversified and risk-aware approach. Companies are now actively seeking to reduce their exposure to high-duty regions by exploring alternative sourcing markets, particularly those covered under Australia’s free trade agreements such as ASEAN, Japan, and South Korea.

This shift is not without its challenges. Establishing new supplier relationships requires time, due diligence, and often, upfront investment. Businesses must assess the reliability, quality standards, and compliance capabilities of potential partners, while also considering logistical implications such as shipping times, port infrastructure, and customs procedures. For some, this has meant relocating parts of their supply chain closer to home, including exploring domestic manufacturing options where feasible, to regain control over costs and timelines.

Another emerging trend is the strategic use of third-country processing to take advantage of preferential tariff treatments. By routing goods through countries with favourable trade agreements and performing value-adding processes there, businesses can potentially reclassify products to benefit from lower duty rates. However, this requires a deep understanding of rules of origin and careful documentation to ensure compliance with Australian customs regulations.

Technology is also playing a critical role in enabling these shifts. Advanced supply chain management systems and data analytics tools are helping businesses model different sourcing scenarios, forecast cost implications, and identify bottlenecks before they become critical. Real-time visibility into inventory and shipment status is becoming essential for managing the increased complexity of diversified supply chains.

To support these transitions, some companies are forming strategic alliances with logistics providers and customs brokers who can offer tailored solutions and up-to-date regulatory insights. These partnerships are proving invaluable in navigating the new trade environment, particularly for small and medium enterprises that may lack in-house expertise.

Ultimately, the businesses that are adapting most effectively are those treating this disruption not just as a cost issue, but as an opportunity to build more resilient and agile supply chains. By re-evaluating supplier networks, investing in technology, and leveraging trade agreements, they are positioning themselves to weather future shocks and maintain competitiveness in a rapidly changing global market.

Long-term resilience through operational adaptation

Building long-term resilience in the face of elevated import duties requires more than short-term fixes—it demands a fundamental rethinking of operational models. Australian businesses are beginning to embed adaptability into their core processes, recognising that agility is now a competitive advantage rather than a luxury. This includes reassessing everything from procurement cycles and inventory management to pricing strategies and customer engagement models.

One of the most immediate operational shifts has been the move towards leaner, more responsive inventory systems. With higher import costs and longer lead times, businesses are reducing their reliance on large stockpiles and instead adopting just-in-time inventory practices where feasible. This not only helps manage cash flow but also reduces the risk of holding obsolete or overpriced stock in a volatile market.

Cost control is also being approached with renewed discipline. Companies are conducting detailed cost-to-serve analyses to identify inefficiencies across their operations. This includes evaluating warehousing expenses, transportation routes, and packaging methods to uncover areas where savings can offset the impact of duties. In some cases, businesses are consolidating shipments or renegotiating freight contracts to achieve better economies of scale.

Workforce capabilities are another critical area of focus. As trade regulations become more complex, there is a growing need for in-house expertise in customs compliance, international logistics, and trade finance. Businesses are investing in training programs and hiring specialists to ensure they can navigate the regulatory environment with confidence. For SMEs, this often means upskilling existing staff or partnering with external consultants to bridge knowledge gaps.

Digital transformation is playing a pivotal role in operational adaptation. Cloud-based enterprise resource planning (ERP) systems, automated customs documentation tools, and AI-driven demand forecasting are helping businesses respond more quickly to changes in the market. These technologies not only improve efficiency but also provide the data visibility needed to make informed strategic decisions in real time.

Some companies are also rethinking their product development and design processes to better align with the new cost structures. This might involve simplifying product lines, using alternative materials that attract lower duties, or designing modular products that can be assembled locally to reduce the value of imported components. Such innovations can help maintain price competitiveness without compromising on quality or brand integrity.

Finally, collaboration across the value chain is becoming increasingly important. Businesses are working more closely with suppliers, distributors, and even competitors to share insights, pool resources, and advocate for clearer regulatory guidance. Industry associations and chambers of commerce are playing a key role in facilitating these conversations and representing business interests to policymakers.

By embedding flexibility, efficiency, and collaboration into their operations, Australian businesses are not only responding to the current trade challenges but also laying the groundwork for sustained resilience in an increasingly unpredictable global economy.

Understanding the scope and impact of new import duties

The recent wave of import duties has sent ripples through the global fashion industry, but for Australian brands and retailers, the impact has been particularly acute. These tariffs are not only broader in scope than initially anticipated, but they’ve also been implemented with little warning, catching many businesses off guard. From luxury ready-to-wear to essential basics, a wide range of product categories are now affected, with duties reaching as high as 25 percent in some cases.

For Australian fashion businesses that rely heavily on imported textiles, trims, and finished garments, the cost implications are immediate and significant. Many brands that source from Europe, the US, and parts of Asia are now facing a sharp increase in landed costs, squeezing already tight margins. This is especially challenging for independent labels and emerging designers who operate with leaner budgets and less pricing flexibility.

It’s not just about the numbers—it’s about the ripple effect on creativity, timelines, and consumer expectations. With higher costs, some brands are being forced to reconsider their seasonal collections, reduce SKU counts, or delay launches. Others are exploring alternative sourcing strategies, but shifting supply chains is neither quick nor simple, particularly when quality and brand identity are at stake.

“We’ve had to rethink our entire pricing structure,” said one Sydney-based womenswear designer. “It’s not just about absorbing the cost—it’s about communicating value to our customers without compromising our aesthetic.”

Retailers, too, are feeling the pressure. Multi-brand boutiques and department stores are reassessing their buy plans, with some opting to reduce orders or shift focus to locally made or duty-exempt lines. For consumers, this could mean fewer international labels on shelves and higher price tags on imported favourites.

• Luxury and premium segments are particularly exposed due to their reliance on European imports.
• Fast fashion players may pivot faster, but risk quality and brand dilution.
• Australian-made collections are gaining renewed interest as a strategic hedge.

As the industry recalibrates, understanding the full scope of these duties is essential—not just for compliance, but for strategic planning. The fashion landscape is shifting, and those who can decode the new rules quickly will be best positioned to thrive.

Strategic responses for long-term business resilience

For Australian fashion businesses, resilience now hinges on agility, creativity, and a willingness to reimagine traditional models. One of the most immediate strategic shifts has been a renewed focus on local production. While historically more expensive, domestic manufacturing is becoming increasingly attractive as brands weigh the long-term benefits of supply chain control, reduced lead times, and exemption from import duties.

Designers are rediscovering the value of proximity—not just to their factories, but to their customers. By producing closer to home, brands can respond more quickly to market trends, reduce overproduction, and build stronger narratives around sustainability and community. This shift is particularly resonant with Australian consumers, who are increasingly conscious of ethical sourcing and environmental impact.

Another key strategy is diversification. Brands that once relied heavily on a single country or region for production are now spreading their risk across multiple sourcing hubs. This includes exploring emerging manufacturing bases in Southeast Asia and even re-engaging with artisanal networks in Australia and New Zealand. While this requires upfront investment in supplier relationships and quality control, it offers greater flexibility in the face of future trade disruptions.

“We’ve started working with a Melbourne-based knitwear studio,” shared a Brisbane label founder. “It’s a smaller scale, but the craftsmanship is incredible—and our customers love the story behind it.”

Pricing strategy is also undergoing a transformation. Rather than simply passing costs onto consumers, many brands are rethinking their value proposition. This includes refining product assortments, elevating storytelling, and investing in customer education around quality and longevity. For premium and luxury labels, it’s an opportunity to deepen brand loyalty through transparency and authenticity.

• Local collaborations and capsule collections are gaining traction as a way to drive excitement and reduce reliance on imports.
• Digital-first strategies, including pre-order models and limited drops, help manage inventory and cash flow more effectively.
• Retailers are curating tighter edits, focusing on pieces that offer both style and substance.

Ultimately, the brands that will weather this storm are those willing to evolve. Whether it’s through reshoring, re-pricing, or rethinking the entire supply chain, the fashion businesses that embrace change with intention and clarity will not only survive—they’ll set the tone for a more resilient and distinctly Australian fashion future.