Trump’s zero sum world leaves Australia walking on eggshells
The Australian Financial Review
Date: 3 October 2025
When Anthony Albanese and Donald Trump meet on October 20, the prime minister should ask how the president sees the US-China relationship. On that question hangs the intimacy of Australia’s strategic relationship with the US and the ambition of our relationship with China.
Australia’s broad strategic options are shaped by the temperature and dynamics of US-China relations. When that relationship is strong, we have wide room to move. When it is cold, our wriggle room shrinks. So how might the prime minister describe to President Trump our Goldilocks spot for US-China relations?
We want the US to lead a collective balancing of China, but not to crush China’s economy. We want the US to constrain China but not to contain it. We want a strong US-China trade relationship, but not at the expense of Australian access to the Chinese market. We accept the need to restrict trade with China in sensitive sectors, but only as long as the list is confined to genuinely sensitive goods.
We do not want a unilateral US balancing of China because that runs a high risk of failure and if it does fail it leaves China stronger. Also, a collective balancing gives Australia a say in strategy.
Collective balancing, the policy of successive US administrations, including Trump 1.0, saw balancing China as a multilateral exercise, including through the Quad (US, China, Australia and India).
Trump, however, has an essentially unilateralist worldview. He sees the world in zero-sum terms. It is a business mindset adapted to international relations. The world spins on the axis of deal-making in which there are only winners and losers. Winners win by exercising leverage wherever it can be found, and no state has more leverage than the US. Losers must accept that they have no cards or at least not enough to ever win.
To the extent that Trump thinks multilaterally, it is that allies and partners should do what the US wants and indeed pay for the privilege. This approach relegates US allies and partners to the margin.
Over time, such an approach will weaken US alliances and partnerships. Allies may not break with the US, but they will get the message that they are more on their own. They will still see US primacy as better than Chinese primacy, but they will not see US primacy as a vital interest in the way Australia currently does. Trump represents the beginning of the slow fracturing of the US system of global alliances.
The big question is how much damage can Trump do over the next three years through a foreign policy driven more by instinct and nostalgia than strategy.
Ignoring Trump is a luxury no country can afford because he wields real power and can impose severe punishments. So what many countries are choosing to do is to humour Trump; to offer him deals he can wave in triumph, but which are hollow promises, such as NATO countries lifting defence spending to 5 per cent of GDP or other countries allowing Trump to decide where their investments in the US will be directed. Let Trump declare victory and hope the promises will never actually be redeemed.
If the US could effectively constrain China unilaterally, none of this would be a great concern. Indeed, it would make life simpler for countries trying to navigate their way through US-China strategic competition.
There is, however, a real question whether the US can unilaterally balance China. The US margin of predominance is narrowing. In the Indo-Pacific, China has the advantage of being a genuinely resident power. Also, China’s primary interest is to be the regional hegemon, whereas the US looks to retain global primacy. China has the luxury of focus; the US the risk of spreading itself too thinly at a time when the power gap between the US and China is slim and narrowing.
The worst outcome for Australia, and indeed for most countries in the Indo-Pacific region, would be a unilateral US strategy that fails. This would strengthen China’s position immeasurably. It would give it a clear path to regional hegemony and may ultimately leave Australia and others such as Japan and India, stranded in a Chinese sphere of influence.
If unilateralism is tried and fails, it would be next to impossible for the US to revert to a strategy of collective balancing. Nor would it be possible for those left stranded by failed unilateralism to construct a collective balance without the US. A balance without the strategic heft of the US is no balance at all.
Trump’s apparent fickleness is both a strength and a weakness. He is not ideologically driven and is flexible on tactics. What he says today may not be what he does tomorrow.
So the big question is not so much where Trump will land on any given policy issue because that too may have a short shelf life. It is how much damage can he do over the next three years through a foreign policy driven more by instinct and nostalgia than strategy.
This is next to impossible to calculate because who knows what target a scatter gun will actually hit. Simply ducking for cover will not work. Flattery will get you quite far, but not far enough. The same applies to contributions to the Trump family wallet, although Pakistan and Middle East rulers seem to have used a combination of both to great effect.
This leaves Albanese in a difficult but by no means impossible position, especially if he focuses on what the US and Australia can do together. He can make some strong arguments about open access to the Australian market and a trade balance very much in the US’ favour; about how we can be a reliable source of critical minerals; how we are subsidising US submarine building; how Australia is holding the line against China in the South Pacific (assuming Trump thinks this is still important); and crucially, how we have made our geography available for joint intelligence facilities and the forward deployment of US forces.
This, together with a dignified politeness towards the president, should be enough to get through a meeting without drama, and even a Trump endorsement of AUKUS. It helps that Trump has nothing against the prime minister, likes a winner and holds no historic grudges against Australia. But it says something about Trump that a successful meeting between our two leaders is defined simply as a meeting which does not end badly. How the world has changed.