Australia will not work with China to resist Donald Trump's tariffs, even as his latest escalation threatens to damage both countries. Deputy Prime Minister Richard Marles has rejected an invitation from ambassador Xiao Qian to "join hands" with Beijing in "solidarity" after the US president threatened its rival with 125 per cent tariffs. "The only way to stop the hegemonic and bullying behaviour of the US in harvesting the whole world is to strengthen solidarity and collaboration, and to jointly resist," the ambassador wrote in an op-ed for Nine newspapers. "Under the new circumstances, China stands ready to join hands with Australia and the international community to jointly respond to the changes of the world." Mr Marles said Australia would pursue its own interests and focus on diversifying its trade, pursuing greater ties with Indonesia, India, the UK and the United Arab Emirates. "I don't think we'll be holding China's hand," he said. "We obviously don't want to see a trade war between China and the US … [but] it's about pursuing Australia's national interests, not about making common calls with China." Mr Trump's latest reversal, which reverted all countries except China to a 10 per cent tariff, amplifies the economic threat to Australia because of its reliance on China. Treasury and RBA modelling suggest the "China channel" is the main way the Trump tariffs will affect Australia, with a hit to our exports likely unless China does enough to stimulate its own economy and prop up its demand. Beijing responded to the first round of tariffs last week with retaliatory tariffs, and Mr Xiao hinted a further response was likely. "China has firmly taken countermeasures to protect its legitimate rights and interests and will resolutely continue to do that," he said. "There is no winner in a trade or tariff war and protectionism leads nowhere." Mr Marles said more diverse trade, with less reliance on China, would strengthen Australia's "economic resilience". "That's really been the lesson not just in the last couple of weeks, but really over the last five or 10 years, about the importance of making sure that we have got strong, diversified trade around the world, and that's our focus," he said. Brewing economic storm dominates election week two Trade Minister Don Farrell met overnight with his EU counterpart to reopen stalled talks on a free trade deal between Australia and the European bloc, and the government continues to lobby for an exemption from the American 10 per cent tariff. But with risks to the Australian economy from the broader global uncertainty, the government's economic response featured heavily in last night's first election debate between Treasurer Jim Chalmers and his shadow Angus Taylor. Mr Chalmers said the government was "well placed and well prepared" for uncertainty. "Our response is all about making our economy more resilient, our markets more diverse, and engaging with the world … "We've got an opposition leader and an opposition which is absolutely full of these kind of DOGE-y sycophants who have hitched their wagon to American-style slogans and policies and especially cuts which would make Australians worse off," he said, referencing Elon Musk's Department of Government Efficiency [DOGE]. Mr said in "tumultuous times" the Coalition was better placed to manage the economy. "When we were last in government, of course, we did take on the Trump administration, and we avoided tariffs," he said. Mr Taylor said the government had "no plans". "Your plan that you put out in your own budget doesn't have our standard of living going back to where it was when you came into government until 2030 or beyond," he said.