US shows solidarity with Australia over China trade war

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China’s punitive trade measures have cost Australian exporters hundreds of millions of dollars and tested our resolve to stand up for our principles. But the good news today is that Australia is no longer facing this hostility alone.

China imposed tariffs and bans on $50 billion a year of Australian seafood, wine, coal and barley as punishment for what it perceived to be unfriendly diplomatic and political moves on Australia’s part towards its growing ambitions and influence in the region.

For the past year, Australia has complained and demanded China drop its economic coercion but, we’re told, Chinese officials would not even pick up the phone.

Yet, as the Herald has reported today, the Biden administration’s powerful Indo-Pacific co-ordinator Kurt Campbell has made a significant gesture by offering to stand by Australia in this dispute. “We are not going to leave Australia alone on the field,” he told political editor Peter Hartcher.

The practical consequences are uncertain but the US has a lot more leverage in handling China than Australia. For instance, China is eager for the US to drop tariffs on Chinese imports – worth hundreds of billions of dollars – imposed by President Donald Trump in 2018 in protest at what he said were unfair trade practices. China also wants the US to allow it to buy US technology, such as microchips.

Too often, when Mr Trump deployed this leverage, his sole focus was his goal of “making America great again”. At one point last year he came close to cutting a deal to drop the tariffs on Chinese goods in exchange for China opening up its markets to American exporters. That could have left Australia high and dry.

Mr Campbell seems to be signalling that as part of any resolution of its trade war with China, the US will insist that the Xi regime must also reconsider its bullying behaviour towards Australia.

“We are not prepared to take substantial steps to improve relations until those policies are addressed and a more normal interplay between Canberra and Beijing is established,” he said.

Australia should appreciate how significant this pledge is, especially in the US where trade is a very sensitive political issue. US farm exporters, who have been hit by Chinese tariffs in retaliation during the US-China trade war, would like Mr Biden to cut a deal for them.

It would be an extraordinary act of solidarity for the US to give equal priority to opening Chinese markets to Australian farmers as to its own exporters.