James Morrow: Albanese and Dutton to pick sides in US/China trade war

The latest turn in the US-China trade war has thrown an unexpected spanner in the Australian election.

The latest turn in the US-China trade war has thrown an unexpected spanner in the Australian election.

Because very soon, perhaps as soon as today, both Anthony Albanese and Peter Dutton will be forced to pick a side in the fight.

Here’s where things stand now.

Overnight, US President Donald Trump paused tariffs on most countries for 90 days while at the same time jacking levies on imported goods from China up to 125 per cent.

So far, so predictable: Trump’s Liberation Day tariffs were always aimed squarely at China.

The wide and sometimes weird sweep of the tariff regime was designed to give China cover to come to the table without losing face in a one-on-one trade war over Beijing’s currency manipulation, intellectual property theft, and other sharp and unfair practices.

But China chose to retaliate, and now the gloves are off between the two nations.

And as part of China’s move to fight back against Washington, they’ve asked for Australia’s help.

Reports indicate that China’s ambassador to Australia Xiao Qian has issued a public statement asking us to “join hands” in the fight against Washington’s trade war.

“Under the circumstances, China stands ready to join hands with Australia and the international community to jointly respond to the changes of the world.”

Dutton and Albo face a tough time in the trade wars.

That’s right, the same regime that five years ago turned off the tap on Australian exports and left our coal languishing at the dock because then-prime minister Scott Morrison took a principled stand demanding China come clean on the origins of Covid, wants to be pals.

This is, incidentally, the same government that’s been doing unannounced live fire exercises in the Tasman Sea and sending spy ships to map the ocean floor and underwater cables around Australia.

Naturally, both Albanese and Dutton will be asked about this today.

Both will be tempted to offer up some carefully crafted words about Australia finding its own path and doing what is in Australia’s interests.

They will be desperate not to say anything that will get them off side with Washington or, more immediately, Chinese-Australian voters who didn’t appreciate Morrison’s tough talk and let it be known in 2022.

But the old world where we could play both sides of the fence, trading with China while throwing a relative pittance at defence because America would always be there.

This is not to say that America is cutting Australia loose: In official circles, both sides of politics are committed to the alliance and see us as a vital part of their “pivot to Asia”.

Instead, it is a recognition of the reality that the old deal that in essence let China finance America’s deficits while getting access to its markets to flood them with underpriced goods is now over.

Just as during the Cold War, we are returning to a struggle between superpowers, only this time it’s between the US and China rather than the US and Russia.

And from Albanese and Dutton on down, we must be much more clear-eyed about who is friend and who is foe.

Originally published as James Morrow: Albanese and Dutton to pick sides in US/China trade war