Australia and China in the Current Trump Era

In 1997, the Australian government’s foreign and trade policy white paper stated: “Australia has interests across the globe but its most important strategic and economic interests lie in the Asia Pacific.” This sets the orthodox thinking of Australia’s place in the world. Today, China is the largest trading partner of Australia, and the US is Australia’s main strategic ally. As the rivalry between China and the US continues to intensify, Australia has also been torn between the two countries. A change of the US administration, therefore, inevitably requires a review of Australia’s strategy to manage its relationship with these two major global players.

Donald Trump’s withdrawal of the US from the Trans-Pacific Partnership (TPP) marked the first shift in the new US administration’s engagement with its allies. Acknowledging that it is “disappointing but not unexpected,” the Australian government has repeatedly indicted that China could be included in the TPP and replace the role of the US. Showing little interest in joining the TPP, China, in turn, has reemphasized its endorsement for the Regional Comprehensive Economic Partnership (RCEP), which is set to conclude by the end of this year. The ASEAN-originated regional free trade agreement has long been seen as a Beijing-backed project that counters the America-led TPP, and it constitutes nine out of the top thirteen trading partners of Australia. Due to the uncertain future of TPP, Australia has been urging for a high quality deal and reaffirmed its commitment to RCEP.

Meanwhile, as the Trump administration adopts its “America First” policy, Australia and China seem to have found more common ground in trade and economic globalization. Free trade has long been seen as the national interest of Australia. When meeting with the US Vice President Mike Pence, Australian Prime Minister Malcolm Turnbull stressed that supporting the TPP is in Australia’s national interest.[1] Far from being a self-sufficient country, Australia is more dependent on trade than the US. An “Australia first” policy, as described by Australian Treasurer Scott Morison, would mean embracing trade and foreign investment.

Similarly, China has been advocating free trade more eagerly after the US withdrew from TPP. Chinese President Xi Jinping’s speech at the World Economic Forum in Davos, and Chinese Foreign Minister Wang Yi’s talk with Australian Foreign Minister, both emphasized China’s commitment to free trade, and implicitly referred to the new US administration as taking a protectionist stance and adding uncertainty to the current international situation. In the meeting with Turnbull, Chinese Premier Li Keqiang mentioned China’s more-than-30-billion trade deficit with Australia in 2016, and stressed that “the solution to trade imbalances lies in further expanding our trade.” This shared commitment to free trade will arguably push for progress in RCEP and deepen the implementation of China-Australia Free Trade Agreement. The economic ties between Australia and China will continue to strengthen while the US is looking inwards.

Different from economic contact such as trade and investment, Australia’s alliance with the US has a strong historical foundation that would not be altered by the arrival of a new US president. Darwin, a coastal city at the northern end of Australia, was attacked by Japan in War World II and witnessed counterstrikes from the US. Since then, Australia’s alliance with the US has been rooted in Australia’s pursuit of its national interest. Australia has fought with the US shoulder-by-shoulder in every major conflict since World War I, including the Vietnam War, Iraq War, and War in Afghanistan. The two countries share intelligence from land, sea, to cyber and outer space. As part of the Obama administration’s “Pivot to Asia” policy, 2,500 US Marines will be set in Darwin, which will mark the largest US troop deployment in Australia since World War II. Few countries today have a similarly faithful ally like Australia.

Nonetheless, disappointment from the failure of the TPP and the infamous phone call between Trump and Turnbull have raised concerns about the dependence of Australia on the US. The Trump administration’s nationalist rhetoric appears to suggest that the US would only defend the world order if it could gain from it, rather than for shared values as before. For the Australians, this position of the US implies that there will be more uncertainty in its surrounding Asia-Pacific region. The Trump administration’s direct confrontation with North Korea, for example, led to an induction of threat for Australia: Pyongyang warned Australia for a nuclear strike and asked the country to rethink about acting as “a shock brigade of the U.S. master.” North Korea’s threat to Australia may seem far-fetched, but it represents the new challenge that Australia is facing under the current US administration: the risk of being drawn into a conflict or unexpected crisis which destabilizes the region, and being forced to take a side between the US and China.

Thus, calls for a more “independent” foreign policy and closer ties with China have risen in Australia. With growing expectation of the US on its ally and unpredictable approach of the Trump administration on policy making, some argue that Australia needs to be more conscious of its own national interest and end its status as “client state”. A closer relationship with China, however, still seems to be hindered by the political differences between the two countries. Australian Foreign Minister Julie Bishop has warned China that it can only achieve its full economic potential by further embracing democracy. Australians are aware of the extended influence of the Chinese government on Australia’s Chinese communities, especially via the control of some Chinese-language media in Australia. Australia’s democratic values, which are in line with the US’, are seen to be challenged by China’s controlling tendencies.

Despite these challenges, being less aligned with the Trump administration could give Australia a more prominent role to play in mediating the relationship between the two superpowers, especially on issues of the Asia-Pacific region. Territorial dispute in the South China Sea, for example, is one of the areas on which Australia could have more potential influence. So far, Australia has repeatedly stated that it takes a neutral stance on competing territorial claims. However, it has recently welcomed dialogue between claimant states of the disputed islands – an approach favored by China while the US insists that other non-claimant states should also be involved. With its military alliance with the US and economic ties with China, Australia could leverage to both sides and help prevent a potential conflict in its backyard.

The legacy of the US-Australia alliance and political differences with China demonstrate the fact that Australia will continue relying on the U.S. as its security guarantor. A change of US presidency will not alter the fact that “Australia is friends of both, ally of one.” Nonetheless, the current era under President Trump has post new challenges for Australia to balance its strategic relationship with the two superpowers. As the US implements its “America First” policy, China will have more leverage to expand and normalize its growing leadership around the world. Having a more comprehensive engagement in this trilateral relationship would be essential for Australia to maximize its own interests, especially in the Asia-Pacific region.

[1] Australian PM, Meeting Pence, Says U.S. had ‘right’ to withdraw from TPP, 28 April 2017, Inside US Trade