Import duties on apparel manufacturing in Australia - Data and Analysis (1994-2033)

The rate of import duties for apparel manufacturing will be kept steady at 5.0% during 2026. The last textile, clothing and footwear (TCF)-related tariff reduction to occur was in January 2015 when import duties on apparel were reduced from 10.0% to 5.0%. The rates are imposed by government legislation, and are set years in advance. Import duties on apparel manufacturing have been declining since the 1990s in response to competition reforms. Import duties for apparel manufacturing were held at 17.5% between 2005 and 2009, before declining to 10.0% in 2010 as per legislative requirements.Tariff duties on clothing imports have fallen sharply over the past two decades, including a drop to 10.0% and 5.0% in 2010 and 2015, contributing to a flood of clothing imports to Australia. Lower tariffs have had a two-fold effect on the overall apparel market, from manufacturer to retailer. Retailers are able to source products directly from overseas manufacturers at a cheaper cost. Conversely, local clothing producers have struggled with the influx of fierce import competition, unable to compete based on price due to high wages and rent expenses. These long-running trends have led many domestic manufacturers to shift production offshore, especially over the past decade.From 2015, countries listed as 'least developed countries' attract 0% tariff on apparel imported into Australia. This includes Bangladesh, which has emerged as a large exporter of cheap apparel to Australia. China has also benefited from the China-Australia Free Trade Agreement (ChAFTA), negotiated in 2015. The tariff on clothing and footwear was gradually reduced to allow local manufacturers time to adjust, decreasing to 0% on 1 January 2017. China accounts for an overwhelming amount of clothing imports to Australia, at just under 60%, while Bangladesh accounts for approximately 8% and Vietnam just over 7%. This trend is expected to make existing tariffs largely obsolete due to the large proportion of global apparel that is sourced from these countries. Free trade agreements were negotiated with South Korea and Japan in 2014, which gradually decreased tariffs for apparel to 0% in January and April 2018 respectively. In addition, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was signed in March 2018. This free trade agreement involves Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. This trend contributed to a surge in imports from Vietnam in the past few years. The Indonesia-Australia Comprehensive Economic Partnership Agreement came into effect in July 2020, which eliminated tariffs on apparel from Indonesia. IBISWorld expects the rate of import duties for apparel outside of free trade agreements to remain steady over the five years through 2026.