Australia can stand with its "customers" and its friends as Scott Morrison says the nation doesn't have to choose between the United States and China.
The prime minister said there are tensions between the two great powers, but Australia can maintain good relationships with both.
"You don't have pick sides in that. You don't have to walk away from the relationships that you have," he told reporters in Sydney on Monday.
"You stand by your friends and you stand by your customers as well."
The US has hiked $200 billion worth of tariffs on China after the two countries were not able to secure a trade deal.
"China is an incredibly important country for Australia's future. Our relationship with China is of course different to our relationship with the United States," Mr Morrison said.
"We manage that relationship in a very pragmatic way, but one based on the values that we share and the aspirations that we have for Australia to pursue its own national interest."
