Treasurer Scott Morrison says nations like Australia which support free trade can't afford to sit by and watch as the US, China and Europe exchange fire over tariffs.
Mr Morrison, who heads to Argentina for a meeting of G20 finance ministers this weekend, told a business forum in Perth the US-China and US-Europe tit-for-tat is "quite serious".
"We must bear in mind that with the global economy having turned the corner in the last 18 months, we cannot allow it to now inflict some sort of economic self-harm by allowing these sorts of exchanges to run away," Mr Morrison said.
However, the treasurer added: "There is no reason to think this cannot be kept under reasonable management."
He said countries like Australia, China, Canada, the UK and the US were now "completely immersed in global trade", having been much less so two decades ago.
The issue needed to be managed with a clear focus on stronger growth, more jobs and taking more people out of poverty, he said.
"If these issues aren't managed with cool heads ... then the world is at great risk of scoring a massive own goal," Mr Morrison said.
The Trump administration imposed a 25 per cent tariff on $US34 billion ($A45.8 billion) of Chinese goods last week in response to complaints Beijing steals or pressures companies to hand over technology.
Beijing responded by imposing similar duties on the same amount of imports from the US.
President Trump hit the EU, Canada and Mexico with tariffs of 25 per cent on steel and 10 per cent on aluminium at the start of June, ending exemptions that had been in place since March.
The EU executive responded by imposing its own import duties of 25 per cent on a range of US goods, including steel and aluminium products, farm produce such as sweet corn and peanuts, bourbon, jeans and motor-bikes.
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