The Turnbull government has downplayed concerns US President Donald Trump could be using a row with North Korea as a pretext for a trade war with China.
Mr Trump tweeted on Monday the US was considering stopping all trade with any nation doing business with the pariah state - a risk for China, its largest trading partner.
"I don't think that anyone approaches these matters flippantly," Australian Trade Minister Steven Ciobo told ABC radio on Tuesday.
"It requires a cool head, a calculated approach about the way in which we can hopefully bring North Korea to heel in terms of their nuclear approach."
Mr Trump has long taken a hardline stance against what he has described as China's 'one-sided' economic policies and its close trading relationship with North Korea.
But Mr Ciobo does not believe the US is using escalating rhetoric regarding North Korea to advance some kind of domestic outcome.
"I don't think that's an approach that they're adopting at all," he said.
Mr Ciobo warned a global trade war would result in a global recession.
Labor says tougher sanctions could be considered to make sure North Korea starts to behave as a proper participant in the community of nations and not a rogue state.
"We should all sincerely hope there is no path here to armed conflict. The seriousness of this cannot be overstated," shadow attorney-general Mark Dreyfus told reporters in Canberra.
