USTR said in a statement following Tai's meeting with Australian Trade Minister Dan Tehan that the two ministers agreed to continue working to develop a digital trade policy that addresses the needs of workers and recognises "the importance of collaboration among those with open, free, democratic systems".

The Chinese embassy in Washington DC did not immediately respond to a Reuters request for comment.

Trade tensions between Australia and China, already rocky after Australia banned Chinese telecoms giant Huawei from its 5G wireless network in 2018, worsened after calls for an international inquiry into the origins of COVID-19, which was first reported in central China last year.

China, Australia's largest trading partner, responded by imposing tariffs on Australian wine and barley and limited imports of Australian beef, coal and grapes - moves described by the US as "economic coercion".

Australia in June challenged the wine duties at the World Trade Organisation.

In May, China's foreign ministry spokesman Zhao Lijian said China "has always held that healthy and stable China-Australia relations are in the fundamental interests of both countries".

But Zhao added that the responsibility for the decline in relations between the two countries was not "not at all China's" and that Australia should treat China with "objectivity" and "rationality".

USTR said Tai "conveyed that the United States stands with Australia to tackle this shared challenge and supports rules-based international trade to promote fair, market-oriented trade practises."

She also told Tehan that the United States was committed to engaging with allies, including Australia, to address China's policies that harm US and Australian workers, businesses and citizens.

The two ministers pledged to continue senior-level discussions on "economic coercion," USTR said.

Australian Associated Press