Australia has rejected Beijing’s proposal to join forces in countering U.S. tariffs, instead opting to continue diversifying its trade relationships and reduce reliance on China, its largest trading partner.
In an interview with Sky News, Deputy Prime Minister Richard Marles stated, “We are not going to be holding hands with China in respect of any contest that is going on in the world.” He emphasized that Australia’s strategy would focus on pursuing its national interests, particularly by strengthening trade ties with regions such as the European Union, Indonesia, India, Britain, and the Middle East.
The move comes after China’s Ambassador to Australia, Xiao Qian, urged Canberra in an opinion piece to collaborate with Beijing in defending the multilateral global trading system. Xiao suggested that under the new global circumstances, China was ready to “join hands” with Australia and the international community to respond to global trade challenges.
The backdrop to this development is a growing trade war between the U.S. and China. On Wednesday, U.S. President Donald Trump announced a temporary reduction in tariffs on several countries but increased the tariff on Chinese goods to 125%, escalating tensions between the world’s two largest economies. This could affect Australia, which exports nearly a third of its goods to China.
In contrast, exports to the U.S. account for less than 5% of Australia’s total goods exports.
While Australia faces limited exposure to U.S. markets, the Australian central bank has warned that the ongoing uncertainty surrounding tariffs and trade restrictions could negatively impact business investment and household spending. Furthermore, Australia has been subject to a 10% unilateral tariff imposed by the U.S., though Prime Minister Anthony Albanese has stated that his government will not retaliate despite the lack of “logical” basis for the duty.
Australia’s rejection of China’s trade proposal highlights its intent to pursue a broader, more diversified economic strategy amid the increasing global trade uncertainties.
