China-Australia relations: US exports ease the pain of China trade reduction, but not enough

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Growth in exports to the United States has eased the pain of Australia's drop in trade with China - the fallout from years of political disputes - but comes up far short of backfilling it.

Since 2020, Chinese traders have stopped importing Australian coal, sugar, barley, lobsters, wine, copper and timber because of political tensions between the two countries.

That followed Australian foreign minister Marise Payne's call for a global inquiry into the origins of the coronavirus pandemic and China's handling of the initial outbreak.

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Last year, China was angry again after Australia, the UK and the US signed Aukus, a deal to share military technology including the possibility of nuclear-powered submarines.

The Australian government's international trade promotion department Austrade calls the US "one of Australia's most important trade and investment partners".

"Unquestionably, trade increased with the US, especially in products such as coal and wine, which had previously been more biased towards China, as a result of the decline in trade ties between Australia and China," said Stuart Orr, head of the School of Business at Melbourne Institute of Technology.

Australia exported US$1.13 billion worth of goods to the United States in January, up from US$945.7 million in January 2021, US$927.3 million during the same month of 2020 and US$881.3 million a year before that, US Census Bureau data showed.

Exports totalled just over US$1 billion in February, up US$29 million from the same month in 2021.

Annual totals have risen steadily over the past 30 years to a peak of US$14.4 billion in 2020 and US$12.5 billion last year.

Chinese-Australian relations brightened when former Australian Prime Minister Kevin Rudd, a Mandarin speaker, took office in 2007.

But two years later, Chinese aluminium corporation Chinalco failed to acquire Australian-based mining giant Rio Tinto. The relationship cooled further when Australia allowed Rebiya Kadeer, leader of the World Uygur Congress, to visit in 2009.

"Underlying the increase in exports to the US, I think, is increased Australian government support for trade with the US as a result of the strengthening political ties between Australia and the US at present," Orr said.

The Department of Foreign Affairs and Trade in Canberra said other countries were offsetting the Chinese market. "Australian exports of goods impacted by China's trade actions have had success in a range of alternative markets," it said in a statement.