Australia's ambassador to the United States, Joe Hockey, has warned President Donald Trump his trademark "America First" rhetoric will leave allies and trading partners questioning their relationship with America, and risks a horrible impact on the domestic economy.

Amid growing reports of turmoil from inside the White House, Mr Hockey used a speech in Chicago to downplay Mr Trump's combative January phone call with Prime Minister Malcolm Turnbull over an asylum seeker resettlement deal and said some countries unfairly look to the US to solve every problem the world faces.

Asked about diplomatic and political concerns in Washington and Canberra, Mr Hockey warned the domestic appeal of isolationist and nationalist politics should be balanced against the impact on strong alliances like with Australia.

"When America says 'America First', as someone with nearly 20 years in politics, I get that . . . but what the rest of the world is hearing is that they're coming second and they're the losers and America is the winner," Mr Hockey told the Chicago Council on Global Affairs on Wednesday.