Building new trade relationships with emerging markets is the best thing Australia can do to protect itself from the growing dispute between China and the United State which threatens to break out into a full-blown trade war, trade minister Steve Ciobo says.

Global markets have been reeling after the world’s two largest economies levelled billions of dollars of punitive tariffs against each other late last week.

The Trump Administration overnight on Thursday announced tariffs worth $US60 billion targeting technology products, and that it would restrict Chinese investments and file a case against it in the World Trade Organisation.

China, Australia’s largest trading partner, hit back on Friday announcing plans to implement tariffs worth $US3 billion, targeting 128 US products including pork, fruit, nuts, wine and steel.

Mr Ciobo, the federal minister for trade, tourism and investment said a trade war would not be in anybody’s interests and called for a cooling of tensions.