New York: Australia's ambassador to Washington Joe Hockey has launched a blistering attack on the isolationist tariff policies of US President Donald Trump, warning the US risks losing its economic dominance and provoking war unless it again becomes a champion of free trade.

In a speech in Missouri on Thursday night (Friday AEDT) Hockey said Trump was right to call out anti-competitive behaviour by China, but that protectionism was a short-term solution that would not solve the flaws in the global trading system.

Australia's ambassador to Washington Joe Hockey said free trade critics base their arguments on "sentimentality and fear, rather than hope and opportunity". Credit:Alex Ellinghausen

In strikingly forthright comments from a diplomat who has built close relationships with the Trump administration, Hockey, whose term as ambassador expires early next year, said the US had made several major economic mistakes in recent years.

These include withdrawing from the Trans-Pacific Partnership and declining to join the China-led Asian Infrastructure and Investment Bank.