Australia will not join hands with China against Trump?

Australia isn't jumping on board with China to resist Donald Trump's tariffs, even though his latest tariff escalation could hurt both countries. Deputy Prime Minister Richard Marles turned down an invitation from China’s ambassador, Xiao Qian, to "join hands" and stand together against Trump’s moves. Xiao argued that the US was using its power to bully other countries and that the best way to fight back was through solidarity. But Marles wasn’t having it, saying Australia would stick to its own interests and focus on diversifying trade with countries like Indonesia, India, the UK, and the UAE.

“I don’t think we’ll be holding China’s hand,” Marles said, stressing that Australia doesn’t want to see a trade war between China and the US but needs to prioritize its own national interests.

Prime Minister Anthony Albanese was a bit more diplomatic, acknowledging that China is a major trade partner and that Australia's trade with China is vital. However, he made it clear that Australia will “speak for ourselves” and won’t be siding with anyone. “There are opportunities for Australia and we intend to seize them,” he said, referring to the potential for trade outside the US-China dispute.

With Trump’s decision to impose tariffs that could harm Australia’s exports to China, the Australian government is looking to strengthen its economy by diversifying its trade. Treasury and Reserve Bank of Australia modeling suggests the tariffs could hit Australia hard, depending on how much China does to boost its economy.

China has already retaliated with its own tariffs, and Ambassador Xiao hinted that there might be more to come. Marles pointed out that Australia’s focus is on building stronger, more resilient trade relationships worldwide, not just relying on China.

The government's approach seems shaped by the tense trade relations with China that began during the Morrison era when Beijing imposed economic punishment on Australia. Despite the trade struggles, Australia remains committed to its economic ties with China, but they aren’t looking to be dragged into a global power struggle between the US and China.

This focus on resilience and economic diversification is also a key theme in the lead-up to Australia’s next election, with Trade Minister Don Farrell working on new deals with the EU and other global partners. Despite the economic uncertainties, Treasurer Jim Chalmers assured that the government is prepared. The opposition, however, took aim at the government's handling of the economy, arguing they haven’t got a solid plan to bring Australia’s standard of living back to pre-pandemic levels anytime soon.

It’s a tricky balancing act for Australia—trying to protect its interests while navigating the global economic storm brewing between the US and China.