Indigenous business are grappling with Australia Post’s decision to stop sending parcels to the US, with one owner suggesting reciprocal trade deals between First Nations groups could help.
Earlier this week, Australia Post announced a “temporary partial suspension” of international parcel deliveries to the United States in response to incoming US tariff rules.
From August 29, the Trump administration’s tariff exemption for parcels under $1,230 will end, impacting small businesses relying on the rule to reduce costs.
‘People will be thinking pretty carefully about buying our products’
Wonnarua woman Amanda Healy is the owner of Kirrikin, which sells luxury clothing printed with Indigenous artworks to Europe and has some customers in the US.
She says she may have to look at private courier companies like DHL, which may cost more and increase the cost paid by the consumer.
“People will be thinking pretty carefully about buying our products if they have to pay an extra 20 or 30 per cent just to get them there,” she told NIRS.
Businesses encouraged to explore partnerships
The decision on parcels comes as Indigenous exporters face increasing amounts of red tape due to the volatile tariffs situation.
That uncertainty around tariffs is having an effect on the coffee business run by Adam Williams.
The Ngunnawal and Wongaibon man is the founder and director of Bunji Enterprises, supplying coffee, tea and bush foods to supermarkets around Australia, as well as exporting to the US.
Mr Williams says Australia Post’s suspension of parcel deliveries to the US won’t affect his business because he exports via containers and mainly to businesses, but tariffs have become a major issue.
He has suggested the Australian government allow Indigenous nations in Australia to make deals directly with other Indigenous nations overseas, and even with foreign governments.
“We haven’t really seen much change in government policy at all to support Indigenous exporters,” he says.
“I think in the last couple of years, Indigenous exporters did over $20 million in trade, with the US being one of those key markets.
“I really do think that we should be able to leverage our representative Justin Mohammed [Australia’s ambassador for First Nations people] to be able to cut our own trade deals, particularly with you know, First Nations people in the US as well.”
He adds that China and other countries are open to negotiations like these.
“I honestly believe they would rather strike an export deal with First Nations businesses and people and groups and communities, than they would with our existing government.”
How tariffs play out for businesses and customers
Consumers in the United States will also be paying a 10 per cent tariff on anything imported from Australia.
When a business in the US orders products from Australia to stock in its store, it must make two payments.
First, the products themselves have to be paid for.
Second, the importer has to pay a tariff when the goods arrive in the US.
The goods will be released to them only once that tariff is paid, but the Australian supplier doesn’t have to worry about the tariff.
However the problem facing Amanda Healy at Kirrikin is that she sells directly to the customer via their website.
It means Kirrikin must know what the tariff is and pay the tariff itself before the product can enter the US.
“I’m not even quite sure what our our tariff is at the moment. It’s changed a number of times and I think we were left with 10 per cent,” she says.
Adam Williams from Bunji Enterprises says Indigenous businesses trying to sell products in the US amid the changing economic climate could also look to partner with other outlets.
“I would potentially look to explore partnerships with Amazon, and have a look for other wholesalers and distributors that are US-owned companies that have facilities here in Australia, in Melbourne and Sydney, and try and form a little bit of a partnership with them,” he says.
“It may be a better option to sacrifice a little bit of the margin on the product than to cop the tariff hit.”
Mr Williams’s latest concern is tariff changes with India, where he sources some of his coffee beans from.
“I know in my instance with India, we’ve had coffee part of the free trade and now all of a sudden without notice or any communications, it’s not,” he says.
He says significant tariffs with India may cost 12 Indigenous employees their jobs, and he will be heading to India next week to renegotiate.
(Feature image: AAP)