Contributed by Joe Montero

Research at the University of Technology in Sydney has found that over the last 18 months, Australian trade with China is being stolen, and mostly by the United States.

The research shows that Australia’s portion of trade fell by $17.3 billion in the first nine months lading to 2020, U.S. exports to China increased by $3.6. Secondary beneficiaries were Canada and New Zealand. Russia has also benefited by filling out some of the trade that Australia is missing.

Trade war against China has seen Australia under the Morrison government go out on a limb, claiming a strategic partnership with the United States, while being stabbed in the back by the supposed ally.

China has reacted to both Australia’s blocks to imports to China and an increasingly aggressive posturing. Among the affected industries have been barley, timber, copper, lobster, and wine. Coal has also been restricted in the wake of China’s turn towards other forms of energy. A shift towards decreasing iron ore imports and diversifying sources will add to Australia’s hurt.

The graphs below help tell the tail.

Another finding of University’s research is that decoupling from the Chinese economy is largely a mirage, except for Australia. This is a substantial economic price to pay for no benefit at all.

Farmers, brewers, and coal exporters are the ones suffering most directly, although the impact is flowing through the economy and hurting everyone in some way.

This is being swept under the carpet by the Morrison government. Not even once has it raised the raiding of Australian trade by the United States. There is silence on the impact this is having on Australia.

For all the noise, Australia’s trade war moves against China is no more than a minor irritation for the world’s second biggest and fastest growing economy, with a population of one and a quarter billion.

Researchers at the Australian National University and the University of Western Australia conducted simulations of the effect of shutting down Australia-China trade by 95 percent. They found it would cause per capita domestic product to fall for 6 to 14 percent for Australia and 0.5 and 2.4 percent for China.

Australia is on the losing side of this battle.

Photo from AFP/Getty: The posturing of Scott Morrison and his government over China is hurting Australia

Why is the Morrison government going down this road?

Trade war against China is designed to meet the political end of holding back that nation’s mergence as the leading economic powerhouse. It’s not going to work. The engine for growth is internal transformation and less by connection to the global economy.

Furthermore, most of the world is prepared to trade with China. The Belt and Road initiative involves around 130 countries in a trading arrangement infrastructure. The United States is not easily going to disconnect itself from such a large part of the global community. This is the reason why Washington has put forward a counter infrastructure plan, relying on linking nations more firmly into its private financial institutions.

But it comes with a $56 trillion price tag, and there is doubt that this is sustainable, given the economic problems the United States already must contend with. Part of this is an already excessive supply of its currency and the winds of inflation. The global debt level already generated by American financial institutions is already leading to crisis, and the American real economy is declining.

Reality compels the United States to keep on trading with China.

The strategy to get around this problem, is to engage in diplomatic warfare and war games. Australia serves as a useful patsy for this. It can nudge at China and place Australia to get the punches. This means Washing doesn’t completely shut the door on China and always leaves a way back in.

As Australian politicians shake the fist at China, leaders of the United States and China engage in talks on how to do more business. Australia gets left out on a limb.