Joe Biden's incoming administration will "rally" its allies behind Australia as Beijing warns Australia "will pay a price" for siding with the United States.
Beijing has refused to take down a tweet posted by its foreign ministry, depicting an Australian soldier holding a knife to the neck of an Afghan child.
The post was in reference to the Afghan war crimes report, which found evidence of the murder of 39 Afghan civilians and prisoners by Australia's elite soldiers.
The tweet has sparked an international controversy, with the US State Department condemning Beijing's hypocrisy over humanitarian abuses of its Muslim Uyghur population. It described the post as "a new low, even for the Chinese Communist Party".
Jake Sullivan, Joe Biden's incoming national security adviser, said the US would lobby the international community to support Australia in the wake of ongoing attacks from Beijing.
The statement comes amid escalating tensions between China and Australia.
Last month, the Chinese embassy in Canberra deliberately leaked a document that listed 14 disputes with Australia that were said to be "poisoning bilateral relations", and last week China slapped tariffs of up to 212 per cent on Australian wine in what the Australian trade minister described as a "devastating blow" to the industry.
Australian Senator Pauline Hanson, leader of the One Nation party, responded by leading calls for Australians to boycott Chinese-made goods. She called for a revival in the Australian manufacturing industry, arguing Australia had become over-reliant on its biggest trading partner.
"We all have our part to play in this. Think about it when you buy … have a look where it comes from. If it's China, let it sit on the shelf," she said.
Those comments prompted a fierce response from Beijing. The Chinese state-affiliated newspaper The Global Times featured an editorial that declared Australia would "pay a price" for siding with the US and calling for boycotts of its products.
"Pauline Hanson, leader of Australia's far-right party One Nation, on Monday called for Australians to boycott Chinese products this Christmas. She and her ilk behave not even like a paper tiger, but a hysterical paper cat," the editorial reads.
"We would like to tell Australian politicians like Hanson that they have over-estimated Australia's importance toward China, and have mistaken the fact that Australia relies on China more in their win-win co-operation. We don't want to insult Australia and its people, but we do despise extreme politicians like Hanson.
"There is no reason for China to continue appeasement toward Australia.
"Chinese society strongly advocates resolute and lasting punishments against Australia and to let the world see clearly – one will eventually pay a price for taking the US side and requiting kindness with ingratitude toward China."
In a separate incident, the Chinese social media giant WeChat censored Australian Prime Minister Scott Morrison's post, which was a direct appeal to millions of Chinese users on the app.
The material published on the PM's official account was deleted overnight, his office confirmed.
Morrison's now-censored WeChat post read: "The post of a false image of an Australian soldier does not diminish our respect for and appreciation of our Chinese Australian community or indeed our friendship with the people of China."
WeChat, in censoring the post, stated that the content "involves the use of inciting, misleading, or contrary to objective facts, text, pictures, videos, etc., fabricate social hot spots, distort historical events, and confuse the public".