US President Donald Trump has brought the world closer to a trade war that could plunge the rules-based global order into an existential crisis. The imposition of tariffs on imported steel and aluminium last month were the opening shots in Trump’s campaign “to level the playing field” for US firms. But his threat to impose punitive tariffs on China, including $US100 billion ($130bn) of additional tariffs on Thursday, risks triggering a serious confrontation with global implications that would be bad news for Australia.

We are an open, trade-dependent country reliant on China for nearly one-third of our exports. The US is our fourth largest trading partner and the No 1 country for outward Australian investment, and our largest foreign investor by far. The last thing we need is a trade war between the two nations that have the greatest capacity to influence our future prosperity and security.

Of course, it is entirely possible that Trump will step back from the precipice after securing concessions from China on better market access for US companies and a reduction of the $US375bn annual merchandise trade deficit with China. These appear to be Trump’s immediate aims and it’s possible that his confrontational tactics will work.

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