Australia is in a vulnerable position when it comes to the trade dispute between China and the US. --As our Greg Navarro reports from Sydney, economists warn that export-rich Australia could feel the full brunt of increasing barriers if an all out trade war materializes.

When it comes to Australia's exports, iron ore tops the list.

Most of it ends up in China where it is used to make steel.

And it's proving to be a steady money-maker for the country's economy.

HUSSAIN RAMMAL, ASSOCIATE PROFESSOR INT'L BUSINESS & STRATEGY, UNIV. OF SYDNEY TECHNOLOGY "If China is importing a lot of material from Australia - iron ore and converting that into steel, making steel products or selling steel into places like the United States, that is a way for Australia to keep growing."

But University of Sydney Technology associate professor Hussain Rammal warns that if a trade war escalates, Australia may find it more difficult to find a home for its iron ore.

HUSSAIN RAMMAL, ASSOCIATE PROFESSOR INT'L BUSINESS & STRATEGY, UNIV. OF SYDNEY TECHNOLOGY "If the US puts up barriers and stops those imports from coming into the country, China will have to reduce its production, that reduction in the output will affect Australia."

And experts say slowing global growth from a full blown trade war would also decrease the need for Australia's iron ore.

GREG NAVARRO SYDNEY "What makes Australia particularly vulnerable in an all out trade war is its reliance on exports - every thing from commodities to services."

TIM HARCOURT, ECONOMIST UNIVERSITY OF NEW SOUTH WALES "We are an export nation and when you think about most of Australia's rock and crops - agriculture and mining goes overseas, our services are very export orientated so we are very much an open economy - we don't want a trade war."

Australia's farmers fear they would struggle to compete with US farmers who receive government subsidies and can afford to lower their prices.

And Rammal says Australia's services sector could feel the strain under slowing global growth.

HUSSAIN RAMMAL, ASSOCIATE PROFESSOR INT'L BUSINESS & STRATEGY, UNIV. OF SYDNEY TECHNOLOGY "We are very reliant on Chinese tourists and Chinese students for our services so that may have an impact long term as well."

Australia's government says foreign investment plays an important role in the country's economy, worth more than $650 billion AUD last year - providing international capital to help boost domestic spending.

But that too could be impacted by a trade war.

TIM HARCOURT, ECONOMIST UNIVERSITY OF NEW SOUTH WALES "If the world becomes more protectionist and we see a complete dry up of foreign investment, and Australia is a young country that relies on foreign investment. so we basically don't want to have a drought in foreign investment either particularly when the US, not to mention our Asian trading partners and the Europeans, are very important investors here in the Australian economy."

An economy that most analysts agree - could not afford the fallout from a full blown trade war.

Greg Navarro, CGTN, Sydney.