Tariffs, Turbulence and Transformation: How Australian Brands Must Rethink Globalisation in a New U.S. Trade Era

By Merline McGregor, Managing Director, Pattern Australia

The global trade winds are shifting, and for Australian brands with eyes on the United States (U.S.) market, the forecast is turbulent.

The reintroduction of steep U.S. tariffs on Chinese imports – and the ongoing debate over how far they’ll go – has already triggered ripple effects well beyond America's borders. While Australian exports to the U.S. aren't the direct target of these duties, the structural reverberations are being acutely felt by brands across our region. Margins are tightening, cash flow is constrained, and long-held assumptions about international expansion are being tested like never before.

Whether these latest changes hold or are walked back again, it’s clear that trade has become more unpredictable than ever. This is not a short-term disruption. It signals a deeper, lasting shift in the evolution of global trade. 

A Tectonic Shift in Global Strategy

For many Australian brands, the U.S. has traditionally symbolised the gold standard for international expansion. However, recent tariff volatility is forcing a fundamental re-evaluation. For the past few months, including at our recent Accelerate conference in the U.S., there’s been a recurring theme: brands are considering shifting their focus. The question is no longer “How do we launch”, or “How do we scale in the U.S.?” but rather, “Should the U.S. still be our first port of call?”

Brands are not pivoting to abandon American ambitions, but protecting themselves against geopolitical uncertainty and building operational resilience. Many brands are now actively assessing market entry into the UK, EU, and parts of Asia. Markets like Singapore, with affluent and digitally savvy consumers, are being viewed as promising alternatives. Others, like Malaysia, are being considered cautiously due to lower spending power, but larger populations.

Even US brands, who have never had to seriously consider alternative markets are looking further afar to redirect products into new territories, thereby derisking themselves from tariff uncertainty. 

In today’s climate, globalisation demands diversification. Relying on a single market or supply source is currently not a viable strategy.

Tariffs and the Cost Avalanche

New research shows tariffs have increased landed costs for Australian exporters to the U.S. by as much as 35%, particularly in product categories like apparel and home goods. The once-safe tactic of drop-shipping Chinese-manufactured products to U.S. consumers has become not only economically unviable but also operationally risky.

Australia’s free trade agreement with the U.S. has offered some protection over the years, but that safety net is starting to show its limits. Depending on where products are made or sourced, some Australian brands are already feeling the pinch.

The increasing freight costs and pressure on margin structures are intensifying the commercial pressure on Australian retailers. Brands are being forced to revisit product classification strategies—like the famous case of Converse sneakers being reclassified as slippers to reduce tariff burdens—and to renegotiate terms with retail partners and distributors.

Fulfilment Rethink: From Global to Local

Another knock-on effect of tariff volatility is the acceleration of local fulfilment strategies. Players like Temu and Shein, known for aggressive global pricing, have responded by investing heavily in domestic warehousing to bypass tariffs and maintain speed-to-market. For instance, Temu’s shift to “local-to-local” fulfilment in Australia has cut delivery times from over 10 days to under six. Decentralisation is proving key to building resilience.

Australian brands are following suit. There’s been a marked uptick in interest around multi-market warehousing, bonded zones, and alternate shipping models like Delivery Duty Paid (DDP) versus Ex Works (EXW). Brands are weighing the trade-offs between air freight and sea freight, increasingly leaning toward the latter to preserve margin at the cost of speed.

For some, these changes have implications beyond logistics, impacting pricing architecture, merchandising calendars, and promotional strategies. Discounting behaviour, for instance, is under review: Do brands reduce markdowns to protect margin? Or accelerate sales to fund new manufacturing lines in regions like India and Vietnam?

The Next 6–12 Months: Tactical Moves for Long-Term Gains

Navigating the months ahead will require Australian brands to stay agile in the face of immediate volatility, without losing sight of the bigger structural shifts underway. This includes reclassifying products in smarter ways to minimise the impact of tariffs. It also means reassessing which international markets to prioritise based on consumer stability and spending power, and diversifying supply chains beyond China, with renewed interest in India, Vietnam, and parts of Eastern Europe.

Staying competitive will require sharper market intelligence to guide pricing and positioning, particularly when entering or expanding into unfamiliar territories. At Pattern, we're supporting clients as they assess the potential impact of tariff changes, reconsider fulfilment strategies, and evaluate new market opportunities. While we’re not customs experts, our focus as ecommerce strategists is to help brands respond quickly and confidently, even as the landscape continues to shift

A Wake-Up Call For the Decade Ahead

These developments should not be viewed as temporary trade turbulence. This has been a wake-up call for many brands and a reminder that it’s not possible to build a global business based on yesterday’s assumptions.

Rather than seeing this as a setback, brands should perceive it as a strategic reset.  Australian brands can compete, and win, on the global stage. Success demands a shift in mindset from traditional product marketing to strategic supply chain thinking. Brands must prioritise trust, speed, and adaptability alongside price. Most critically, long-term success hinges on making bold decisions now to secure a competitive edge in the future. 

This isn’t just about getting through the latest round of tariffs. It’s a chance for brands to reset, rethink where and how they grow, and build a business that can hold its own, no matter what comes next.

To learn more about futureproofing your brand, visit https://pattern.com/