Australian premier Anthony Albanese stresses trade with China in meeting with President Xi Jinping

SEOUL, South Korea — Australian Prime Minister Anthony Albanese emphasized his country’s economic ties with China over the U.S. in a meeting Tuesday with Chinese President Xi Jinping in Beijing in anticipation of a higher U.S. tariff on Australian goods starting next month.

Australia is hosting a massive military exercise with more than a dozen nations, including the United States.

“China is our major trading partner, the destination for more than 1 in 4 of our export dollars,” Mr. Albanese told a post-summit press conference. “Our trade with the U.S. is less than 5%.”

The Australian prime minister’s summit with Mr. Xi has generated scrutiny because Mr. Albanese has yet to meet with President Trump. Mr. Trump’s tariffs have roiled Australian markets and irked its leaders.

U.S. tariffs have raised special ire in Australia, which — unlike regional powerhouses China, Japan, South Korea and Taiwan — has run trade deficits with the United States since the 1990s. Only in 2025 has Australia lodged a modest surplus.

“We continue to put our case forward that [the U.S. tariff] shouldn’t be 10[%],” Mr. Albanese said last month. “It should be zero. That is what a reciprocal tariff will be. We have a U.S. free trade agreement.”

Mr. Trump has called for U.S. tariffs to increase to 30% on Aug. 1 if trade deals with targeted nations, including Australia, have not been secured.

“There clearly isn’t a strong personal rapport” between Mr. Albanese and Mr. Trump, the right-leaning Australian think tank Lowy Institute said. It added that the leaders’ dissonance will likely “reverberate throughout their respective systems.”

The Lowy Institute noted that recent polls have found Mr. Trump deeply unpopular among Australians. It opined that Mr. Albanese, who won reelection in May in a landslide, “need not dance to Trump’s tune. … Just as Trump likes to invoke America First, Albanese has his own version.”

“There is probably some animosity toward [Mr. Albanese’s] Labor Party,” said David Arase, a professor at the Johns Hopkins University School of Advanced International Studies. “Trump would probably rather have dealt with the conservatives.”

Mr. Albanese told reporters in Beijing that Australia’s trade is overweighted toward China. “We want to see a diversification of our trade,” he said.

Talisman Sabre

Amid economic tensions with the United States, Australia is hosting its largest military exercise. It is expected to attract the attention of Chinese spy ships as 35,000 international troops engage in war games on land and sea, as well as in the air, space and cyberspace.

Military personnel from 19 nations, including Britain, Canada, Fiji, France, Germany, India, Indonesia, Japan, the Netherlands, New Zealand, Norway, Papua New Guinea, the Philippines, South Korea, Singapore, Thailand and Tonga, will participate over three weeks, Australia’s defense agency said. Malaysia and Vietnam are attending as observers.

Known as Exercise Talisman Sabre, the war games started in 2005 as a biennial exercise between Australia and the United States. For the first time, Talisman Sabre has expanded outside Australia. It is taking place in Papua New Guinea, Australia’s closest neighbor.

Though the war games do not target any enemy state, participating democracies broadly agree that China is the key regional threat.

Chinese surveillance ships have monitored naval exercises off the Australian coast during the past four Talisman Sabre exercises and are expected to surveil the current exercise, Defense Industry Minister Pat Conroy said.

Australian divers have been pinged by Chinese sonar in recent months, and Australian aircraft have been buzzed by Chinese jets. In February, Chinese warships circumnavigated Australia and conducted live-fire drills in international waters off its coast.

Asked about the meeting in Beijing, Mr. Albanese said he told Mr. Xi that “there was no breach of international law by China … but we were concerned about the motive and the way it happened, including the live-fire exercises.”

Pressed by reporters, Mr. Albanese said: “I put forward Australia’s position, which is that we want peace and security in the region. That is in the interests of Australia and China.”

Defense and diplomacy

Canberra, a U.S. treaty ally, has long been a foul-weather friend. It deployed troops to U.S.-led expeditionary conflicts in Afghanistan and Iraq but did not escape U.S. criticism of its defense spending.

“Australia is currently well below the 3% [of gross domestic product] level advocated for NATO … and Canberra faces a far more powerful challenge in China,” Undersecretary of Defense Elbridge Colby said during his confirmation hearing in March.

Mr. Albanese has committed to increasing defense spending to 2.33% of GDP, much of which will be devoted to AUKUS, Australia’s 2021 trilateral security agreement with the United Kingdom and the United States.

Two Canberra administrations and two London governments have invested significant political capital in AUKUS, the most ambitious and expensive defense project in Australian history. Under the agreement, Britain and the U.S. will supply Australia with nuclear submarine technologies.

However, in a meeting with British Prime Minister Keir Starmer, Mr. Trump indicated he was unfamiliar with AUKUS.

The Financial Times reported last month that Mr. Colby was reviewing AUKUS. He worries that the U.S. lacks the capacity to build enough nuclear attack submarines for the Navy.

Attack submarines are considered key deterrents against a Chinese attack on Taiwan.

On Sunday, the Financial Times reported that Mr. Colby has demanded that Australia and Japan clarify their roles in a potential defense of Taiwan.

After publication, Mr. Colby posted on X: “Some among our allies might not welcome frank conversations.”

Canberra responded frankly.

“The sole power to commit Australia to war or to allow our territory to be used for a conflict is the elected government of the day,” Mr. Conroy said. “Sovereignty will always be prioritized.”

• This article is based in part on wire service reports.