Former Prime Minister Kevin Rudd, one of Australia’s foremost voices on China, believes there is a 50-50 chance the United States and the Asian superpower will be able to settle their escalating trade war.

But the former Labor leader warned the resolution could have significant consequences for Australia.

Mr Rudd, speaking at the Lowy Institute think-tank, said the likelihood of the two most powerful nations producing an agreement was now in “50-50 territory”.

“China’s economy has been relatively weak domestically,” he said on Thursday.

“A brave face is being put on the amount of stimulus that can be delivered.”

China could weather a “full-scale trade war” with the US for only one season, he added.

“But then it really starts to add up.”

US President Donald Trump, similarly, would be coming under economic pressure as an election year looms.

“Do you want this thing to trigger an end to the business cycle? Because Wall Street is skittish,” he said, adding there would be fears a trade war could move the nation closer to recession.

“The Trumpster knows two things. I read opinion polls and I read the Dow.”

“He, at that level, wants it done.”

China and the US would also be aligned on political will.

“The politics is one about saving face,” he said.

Mr Rudd, who is also president of the Asia Society Policy Institute, made reference to headlines in Chinese newspapers last month that announced “red lines” that Beijing would not cross.

The two nations were officially at loggerheads on tariffs and China would not continue to entertain Mr Trump’s “ever-inflating” demands for US goods to flow into the country.

Mr Rudd said Washington and Beijing would both need to “yield” on the matters.

“Mind you, the third country consequences of that, including for countries like Australia, may not be insignificant,” he warned.

Mr Rudd also took the time to criticise former Liberal prime minister Malcolm Turnbull who, in late 2017, strongly admonished China’s alleged foreign interference in Australian politics.

“That was just nuts,” Mr Rudd said, adding Australia’s political class needs to improve how it handles its massive neighbour.

“Have a level of maturity and reflection about whether the use of the megaphone, in dealing with Beijing or Jakarta or Delhi or whatever, is actually prosecuting a core national interest or value as opposed to some grubby local politics,” he said.

“That’s the discipline that has to be brought to bear.”