Australia must tread warily in any US-China standoff, Australian Chamber of Commerce and Institute says

Australia needs to carefully manage ties with its biggest trading partner, China, and No. 1 investor and key ally, the US, as the world’s two largest economies face off, the head of the Australian Chamber of Commerce and Institute said. There’s potential for the rules-based order to go “out of the window” and for a “much more confrontational trade environment” to emerge, Andrew McKellar, chief executive officer of the ACCI, said Tuesday in an interview with Bloomberg Television. His comments came shortly after US President Donald Trump ordered a 25 per cent tariff on all steel and aluminium imports, having earlier imposed 10 per cent tariffs on Chinese goods. Beijing responded with a range of import duties on US goods, including a 15 per cent border tax on imports of coal and liquefied natural gas. Australia is at risk “as a medium-sized open economy reliant very much on our trade partnerships,” Mr McKellar said. “We’ve got a lot invested in that and those relationships are important. We don’t want to be collateral damage in a big fight between the global giants in the trade world.” Canberra has long had to manage its economic ties with China and learned in recent years the consequences of getting it wrong, when Beijing imposed punitive trade measures on some Australian products. It only lifted the last of those in 2024. Yet with Trump in office in Washington, Canberra not only needs to manage ties with a one-party Communist state as its top trading partner, it also now has an unpredictable president in the White House that it needs to keep engaged as an ally. “China is our largest trading partner, that’s not going to change,” Mr McKellar said, adding that the improved relationship is something that Australia shouldn’t jeopardise.