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SEOUL, South Korea — Australian Prime Minister Anthony Albanese emphasized his country’s economic ties with China over the U.S. in a meeting Tuesday with Chinese President Xi Jinping in Beijing.
The bilateral summit comes as a higher U.S. tariff on Australian goods is set to take effect next month and Australia is hosting a massive military exercise with more than a dozen nations, including the United States.
“China is our major trading partner, the destination for more than 1 in 4 of our export dollars,” Mr. Albanese told a post-summit press conference Tuesday. “Our trade with the U.S. is less than 5%.”
The Australian prime minister’s summit with Mr. Xi has generated scrutiny, given that Mr. Albanese has yet to meet with President Trump, whose tariffs have roiled Australian markets and irked its leaders.
U.S tariffs have raised special ire in Australia, which — unlike regional powerhouses China, Japan, South Korea and Taiwan — has run trade deficits with the United States dating back to the 1990s. Only in 2025 has Australia lodged a modest surplus.
“We continue to put our case forward that [the U.S. tariff] shouldn’t be 10 [percent],” Mr. Albanese said last month. “It should be zero. That is what a reciprocal tariff will be. We have a U.S. free trade agreement.”
Mr. Trump has called for U.S. tariffs to increase to 30% on Aug. 1 if trade deals with targeted nations, including Australia, have not been secured.
“There clearly isn’t a strong personal rapport” between Mr. Albanese and Mr. Trump, the right-leaning Australian think tank Lowy Institute noted, adding that the leaders’ dissonance will likely “reverberate throughout their respective systems.”
The Lowy Institute noted that recent polls have found Mr. Trump deeply unpopular among Australians, opining that Mr. Albanese, who won reelection in May in a landslide, “need not dance to Trump’s tune … Just as Trump likes to invoke America First, Albanese has his own version.”
“There is probably some animosity toward [Mr. Albanese’s] Labor Party,” added David Arase, a professor at Johns Hopkins University School of Advanced International Studies. “Trump would probably rather have dealt with the conservatives.”
Mr. Albanese told reporters in Beijing that Australia’s trade is over-weighted toward China. “We want to see a diversification of our trade,” he said.
Talisman Sabre
Amid economic tensions with the United States, Australia is hosting its largest military exercise that is expected to attract the attention of Chinese spy ships as 35,000 international troops engage in war games on land and sea, as well as in the air, space and cyberspace.
Military personnel from 19 nations, including Canada, Fiji, France, Germany, India, Indonesia, Japan, the Netherlands, New Zealand, Norway, Papua New Guinea, the Philippines, South Korea, Singapore, Thailand, Tonga, and the United Kingdom, will take part over three weeks, Australia’s defense agency said. Malaysia and Vietnam are attending as observers.
Known as Exercise Talisman Sabre, the war games started in 2005 as a biennial exercise between Australia and the United States. This year marks the first time Talisman Sabre will take place outside Australia — in Papua New Guinea, Australia’s closest neighbor.
Though no enemy state is targeted in the war games, it is broadly understood among participating democracies that the key regional threat is China.
Chinese surveillance ships have monitored naval exercises off the Australian coast during the last four Talisman Sabre exercises and were expected to surveil the current exercise, Defense Industry Minister Pat Conroy said.
In recent months, Australian divers have been pinged by Chinese sonar and Australian aircraft have been buzzed by Chinese jets. In February, Chinese warships circumnavigated Australia and conducted live-fire drills in international waters off its coast.
Asked about the latter event in Beijing, Mr. Albanese said he had told Mr. Xi that “there was no breach of international law by China … but we were concerned about the motive and the way it happened, including the live-fire exercises.”
Pressed by reporters, Mr. Albanese said: “I put forward Australia’s position which is that we want peace and security in the region. That is in the interests of Australia and China.”
Defense and diplomacy
Canberra, a U.S. treaty ally, has long been a foul-weather friend, deploying troops to U.S.-led expeditionary conflicts in Afghanistan and Iraq. However, Australia has not escaped U.S. criticism of its defense spending.
“Australia is currently well below the 3% [of GDP] level advocated for NATO … and Canberra faces a far more powerful challenge in China,” Under Secretary of Defense Elbridge Colby said during his confirmation hearing in March.
Mr. Albanese has committed to increasing defense spending to 2.33% of GDP, with much of that devoted to AUKUS — Australia’s 2021 trilateral security agreement with the United Kingdom and the United States.
Two different Canberra administrations and two different London governments have invested significant political capital in AUKUS, the most ambitious and expensive defense project in Australian history. Under it, the U.K. and the U.S. will supply Australia with nuclear submarine technologies.
However, Mr. Trump expressed non-familiarity with AUKUS in a meeting with British Prime Minister Keir Starmer.
The Financial Times reported last month that AUKUS was being reviewed by Mr. Colby, who worries that the U.S. lacks the capacity to build enough nuclear attack submarines for its own navy.
Attack submarines are considered key deterrents against a Chinese attack on Taiwan.
On Sunday, the FT reported that Mr. Colby has demanded that Australia and Japan clarify their roles in a potential defense of Taiwan.
Post-publication, Mr. Colby posted on X: “Some among our allies might not welcome frank conversations.”
Canberra responded frankly.
“The sole power to commit Australia to war or to allow our territory to be used for a conflict is the elected government of the day,” acting Defense Secretary Pat Conroy said. “Sovereignty will always be prioritized.”
• This story is based in part on wire service reports.
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