Australia on Thursday refused China's proposal to form an alliance against US tariffs, with Deputy Prime Minister Richard Marles explicitly stating that Australia would not be "holding hands with China" in global trade disputes.

"We are not doing that. What we are doing is pursuing Australia's national interests and diversifying our trade around the world," Marles told Sky News. His comments came in response to the Chinese ambassador's suggestion that countries should "join hands" on trade matters.

Instead of partnering with China, Australia plans to build economic resilience by strengthening trade relationships with multiple partners. Marles specifically mentioned pursuing stronger ties with:

• European Union
• Indonesia
• India
• Britain
• Middle East

Chinese Ambassador to Australia Xiao Qian had written an opinion column in The Age newspaper urging Australia to work with China to defend the multilateral global trading system. "China stands ready to join hands with Australia and the international community to jointly respond to the changes of the world," Xiao stated.

The proposal came after US President Donald Trump announced he would temporarily lower tariffs on dozens of countries while increasing duties on China from 104% to 125%. This development further heightens trade tensions between the world's two largest economies.

The situation creates potential risks for Australia, which exports almost one-third of its goods to China, while shipments to the United States account for less than 5% of Australia's total goods exports. Australia's central bank has warned that ongoing trade uncertainties could negatively affect business investment and household spending.

Trump has imposed a 10% tariff on Australian imports, which Prime Minister Anthony Albanese described as having "no basis in logic." Despite this, Albanese confirmed that his government would not take retaliatory actions against the United States, a key security ally in the Indo-Pacific region.

Australia recently secured a major $6.5 billion deal with Canada for its Jindalee Over-the-Horizon Radar technology. The agreement aligns with Albanese's strategy of trade diversification, as he noted: "It's important that we develop that diverse series of relationships and Canada is a very important one, we have so much in common."