Aukus in question as Trump administration signals strategic review

Thursday 12 June 2025 - 07:00

By: Zahouani Ilham

Aukus in question as Trump administration signals strategic review

The Trump administration’s decision to reassess the AUKUS agreement has stirred political debate across Australia, though it doesn't necessarily spell the end for the trilateral security pact. Australian Defence Minister Richard Marles responded calmly, noting that Canberra had been informed of the review for weeks. He emphasized that such a move is normal when a new U.S. administration wants to reassess existing commitments.

While some analysts argue AUKUS continues to offer strategic benefits to the U.S., the review has sparked strong opinions. Supporters are defending the pact's value, while critics view this as a possible exit from an agreement they see as a strategic blunder for Australia. At the same time, there's increasing speculation that Washington may use this review to pressure Australia into boosting its defence budget a potentially awkward issue ahead of a possible meeting between Prime Minister Anthony Albanese and Donald Trump.

Details of the review remain limited, but a Pentagon official noted it aims to align with Trump’s “America First” priorities, especially ensuring military readiness and industrial capacity. The review is being led by Elbridge Colby, a known AUKUS sceptic who has shown more openness since taking office. Colby has previously stated that the U.S. would only transfer nuclear-powered submarines to Australia if it can significantly boost its own submarine production currently at 1.2 submarines per year, with a required target of 2.33 to proceed with transfers.

Analysts like Euan Graham stress the U.S. needs to be persuaded that any short-term loss to its Navy is justified by long-term strategic benefits such as interoperability and regional basing. Congressional and Navy support will be crucial. Pulling out now could damage U.S. credibility and hurt diplomatic relations, especially with Australia, as pointed out by analyst Richard Fontaine.

The review isn’t just about submarines. It’s also about broader defence cooperation and ensuring allies increase their defence spending. Recent public statements from U.S. officials have called for Australia to substantially boost its military budget. While no one has explicitly linked defence spending to the survival of AUKUS, the connection appears clear.

Some Australian lawmakers anticipate Trump will push for more financial support from Australia for the U.S. submarine industry. With a potential meeting between Albanese and Trump looming at the G7 summit in Canada, defence matters especially AUKUS are expected to dominate the agenda. The well-timed leak of the review may be a deliberate strategy to apply pressure on Canberra.

If AUKUS were to collapse, Australia would face significant financial losses. The country has already committed billions to the U.S. and UK to enhance submarine production capacities. In early 2025, Australia made a $768 million payment to the U.S. as part of a $4.7 billion pledge and is expected to contribute another $4.6 billion to the UK for the future SSN-AUKUS fleet. These payments, which appear non-refundable, would leave Australia with little to show if the deal is canceled.

Beyond the financial costs, Australia is investing heavily in infrastructure for AUKUS, including a $1.7 billion nuclear submarine base near Perth, expected to be operational by 2027.

As for alternatives, options are limited. Since former Prime Minister Scott Morrison ended the submarine deal with France to pursue AUKUS, it has become central to Australia's defence strategy. Defence Minister Marles has dismissed the idea of a backup plan, despite the growing uncertainty. Restarting talks with France or seeking deals with Germany or Japan would be challenging, given past rejections and production constraints.

If AUKUS fails, Australia will face a significant capability gap just as regional security risks are intensifying and no clear path forward for replacing its ageing Collins-class submarines.