There’s been a lot of commentary in the past few weeks about the way Donald Trump and foreign policy have intervened in, or loomed over, the Australian election campaign.<\/p>\n
We aren’t really used to it, and it shows.<\/p>\n
The “debate” veers between a schoolyard discussion about who can be besties with the loudmouth bully, and a slightly uneasy, and not quite addressed noting of the fact that, er, the world trade system and geopolitics are in a state of complete upheaval.<\/p>\n
The way our relationships with the United States and China might play out amid this upheaval tends to be seen in bilateral terms.<\/p>\n
But there is so much more going on out there while we are consumed (or not) by our federal election than simple bilateral relationships.<\/p>\n
Whoever wins on May 3 will face not just a multi-dimensional game of global economic and geo-strategic chess, but possibly an epoch-defining choice for the country.<\/p>\n
<\/p>\n
US President Donald Trump met with Italian Prime Minister Giorgia Meloni in the Oval Office at the White House in Washington, D.C. this week.\u00a0 (Reuters: Evelyn Hockstein)<\/p>\n
World’s biggest economies locked in battle<\/p>\n
This week, the Italian prime minister, Giorgia Meloni, met with President Trump at the White House.<\/p>\n
Trump likes the right-wing Meloni.<\/p>\n
After several weeks of the president saying things such as the European Union is “pathetic” and accusing the trading bloc of “ripping off” the US, he declared as he met with the Italian that there would “100 per cent” be a trade deal with the European Union.<\/p>\n
Made in China: Aussie firms caught in trade war<\/a><\/p>\n From toy brands to fashion labels, some Australian firms are facing tariffs way above the 10 per cent “baseline”. Company owners say they are not getting enough support as they navigate soaring tariffs to send Chinese-made goods into the US.<\/p>\n “They want to make one very much, and we’re going to make a trade deal, I fully expect it and it’ll be a fair trade deal,” he said.<\/p>\n For her part, she said: “the goal for me is to make the West great again \u2014 and I think together we can do it”.<\/p>\n The meeting might have lacked the jaw-dropping drama of that between Trump and Ukrainian President Volodymyr Zelensky, but it is exceptionally significant.<\/p>\n There is now something of a battle going on between the world’s biggest economies for the heart and trade of the EU.<\/p>\n Like the rest of the world, China has been moving to rewire its global trade connections in the wake of the Trump tariffs and has been escalating its trade talks with the European market in recent weeks.<\/p>\n For its part, the EU has shifted its language away from talk about its strategic vulnerability to China to a discussion about mutually beneficial ties.<\/p>\n This is all being done in a world where the possibility of two major trading blocs emerging is now being discussed.<\/p>\n That is, a trading bloc with the United States at its centre, and one with China at its centre.<\/p>\n Nations forced into new alliances<\/p>\n Analysts say that everything the Trump administration is doing now is aimed at isolating China economically.<\/p>\n Of course, there is also a clear link in the administration’s mind between imposing tariffs and making the world “pay” for the strategic cost of its defence, particularly Europe.<\/p>\n The EU \u2014 which collectively is one of the world’s biggest trading blocs \u2014 is obviously the biggest prize to gain for either the US or China in creating a powerful trade bloc.<\/p>\n It’s hard to conceive of that happening.<\/p>\n Read more about the federal election:<\/p>\n Want even more? Here’s where you can find all our 2025 federal election coverage<\/a><\/p>\n But if the EU was to decide, collectively, that the attractions of a zero tariff alignment with the US was irresistible, it would help knock over the dominoes to a world where nations found themselves having to make decisions about whether they were “with” the US on trade or not.<\/p>\n As Financial Times columnist Rana Foroohar wrote recently:<\/p>\n “The U.S doesn’t even want to count unequivocally on allies that have significant trade relationships with China, as Europe does (China is the EU’s largest import partner, and trade dependency between the two regions has increased in recent years), because the administration doesn’t believe it will be able to trust them, given their economic dependence on Beijing.”<\/p>\n<\/blockquote>\n Hmm, US allies that have significant trade relationships with China\u2026<\/p>\n That would include\u2026 Australia!<\/p>\n Loading…Who would Australia choose?<\/p>\n Diplomats in Canberra ask these days where Australia would sit if we ended up in a world of two competing trade blocs: with the US or China?<\/p>\n Given our complete economic enmeshment with China, the answer might seem simple but would obviously put us in a bit of a tight spot.<\/p>\n ABC Politics in your inbox<\/a><\/p>\n Sign up to the ABC Politics newsletter with Brett Worthington<\/p>\n Strategic analyst Hugh White has argued for years that Australia would likely face a choice between its key strategic partner, the United States, and its major trading partner, China.<\/p>\n The debate over this idea has tended to play out in terms of defence and geo-strategic strategy \u2014 for example, would we side with the US over a Chinese invasion of Taiwan? \u2014 rather than one that begins in the economic realm.<\/p>\n But the complex wheels of the haphazard Trump administration “strategy” on tariffs and rebalancing the world order means that this prospect of two new global trading blocs emerging now underpins the possibility of us having to make an economic choice between the US and China which obviously has strategic consequences.<\/p>\n How this all plays out is only further complicated by some of the ideas racing around Washington, apparently influencing decisions and pronouncements.<\/p>\n Loading…The Mar-a-Lago Accord<\/p>\n It’s become known as the “Mar-a-Lago’ Accord”: an ambition to build up the US manufacturing sector by a combination of tariffs and a much weaker US dollar.<\/p>\n The American dollar’s status as a reserve currency has kept it higher than underlying economic numbers might suggest for decades, which makes the US uncompetitive.<\/p>\n\n