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

Australia is seeing growth in its exports to the US, totalling US$1 billion a month, but that is not enough to offset the drop of trade with China

Yellow Tail wine sends half of its global trade to the US, other US imports from Australia include beef, grain, metals and medical instruments

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China and Australia’s political tensions have resulted in increased Australian exports to the US, but not enough to cover the loss of trade with China. Photo: David Gray/Bloomberg

Published: 4:30am, 9 Apr 2022Updated: 9:18am, 9 Apr 2022

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.

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.