The ‘China’ challenge: now a multi-generational test for Australian strategy

In the week of Australia’s 3 May election, ASPI will release Agenda for Change 2025: preparedness and resilience in an uncertain world, a report promoting public debate and understanding on issues of strategic importance to Australia. This is an article from the report.

Navigating increasingly complex and sharp geostrategic competition while advancing Australia’s long-term national interests will be the fundamental test for the next government. China remains a key systemic challenge in this regard—not just for Australia but for the Indo-Pacific and the rules-based order that has served Australia so well since World War II.

Since entering office, the Albanese government has approached its China policy through the prism of stabilisation—along with the formula of cooperating where we can, disagreeing where we must, and engaging in the national interest. That has worked to reset the bilateral relationship, but stabilisation is a transitionary state, not a strategy. Australia’s ‘China challenge’ isn’t cyclical. It’s structural. And, thus, it requires fundamental change for Australia to retain agency and sovereign decision-making.

Indeed, the current relationship is one of increased diplomacy simultaneously with increased malign Chinese activity, and therefore more uneven. Put another way: when one party is seeking stability and another is seeking to destabilise, the destabiliser will always be dominant until facing pushback.

This means, for an incoming government, the key question is: now that Australia–China relations have stabilised in diplomacy but not security, is there a need for a next phase? The answer should be ‘Yes.’

A mercantilist Trumpian world makes this already difficult task harder. The US–Australia relationship remains crucial to security in the region, but Australia must adapt to new realities. The (slim) possibility of a grand bargain between Washington and Beijing also has the potential to sideline Indo-Pacific allies, including Australia. The risk lies in the potential for a US–China agreement that prioritises perceived bilateral interests over the collective security and economic wellbeing of the region.

The unlikely possibility of a grand bargain isn’t the only threat from the US–China relationship. Ad hoc agreements, such as a potential deal over TikTok that doesn’t solve the national-security risk, will also affect Australia, both nationally and regionally. That’s because any sign that the US will take a purely economic approach to China will probably only incentivise more nations to do the same and become even more (over) dependent on the Chinese economy and technology.

To ensure that the US remains invested in the liberal democratic order in the Indo-Pacific, Australia must clearly and consistently demonstrate to the US the tangible benefits of doing so.

Australia has already faced years of coercion from Beijing for choosing national security and international alliances over economic gain but should expect growing pressure to pick sides in ways that will constrain trade and investment choice. The Trump administration’s America First Trade Policy and America First Investment Policy indicate that countries with close trade and investment ties with China could face new obstacles when investing in the US, while countries without those ties may enjoy expedited access.

Amid this ‘harsh’ competition, we’re seeing China accelerating its efforts to pursue military, economic and technological dominance. China’s military aggression has become more pronounced over the past year. In August 2024, a Chinese spy plane breached Japanese airspace for the first time ever. Later in the year, the Chinese Government held its largest military exercises around Taiwan in almost 30 years. Meanwhile, unsafe encounters between Chinese and Australian military aircraft, initiated by the Chinese, have continued to roil relations.

Compounding this is the ‘creeping normalcy’ of China’s use of coercion to bully its near neighbours and to advance unlawful maritime claims, threaten maritime shipping lanes, and destabilise territory along China’s periphery—namely the South China Sea and Taiwan Strait.

More unusually, in February this year, three Chinese warships sailed 150 nautical miles east of Sydney to what Australia’s Director-General of National Intelligence, Andrew Shearer, described as ‘the furthest south a PLAN task group has operated’. Days later, the Chinese vessels undertook live-fire drills in the Tasman Sea in an unprecedented exhibition of non-allied force—before undertaking an almost complete circumnavigation of the continent. Analysts expect such activities to become more frequent as the PLAN expands its power-projection capabilities south—sending a message not just to Australia and New Zealand, but to Pacific partners as well. The message to, and about, the US shouldn’t be ignored: Beijing was telling the US that it can’t prevent China creating a sphere of influence, and telling regional nations that the US had lost power. It didn’t help that a less than ideal response from the Australian Government was reinforced by no comment at all from the US administration.

Meanwhile, the Cook Islands recently signed a pact to deepen ties with China, without consulting with New Zealand (its free association partner). The prospect of a standing Chinese military presence in the southwest Pacific continues to haunt Australian defence planners. Equally concerning for our economic and fiscal planners are persistent risks associated with China’s debt-trap diplomacy, which is creating significant debt burdens, straining the economies of Pacific nations, diverting resources from essential services and requiring Australia to step in.

In emerging technologies—what’s now the ‘centre of gravity’ when it comes to national power—ASPI’s Critical Technology Tracker confirms that China now leads advanced research in 57 of 64 key fields. Those technologies include many with defence applications, such as radar, advanced aircraft engines, drones, swarming and collaborative robots, and satellite positioning and navigation. The number carrying a high risk of monopoly by China has jumped from 14 in 2023 to 24. China is expected to further expand that dominance over the next decade, and we’re already seeing its investment in research resulting in commercial innovation and leadership (for example, DeepSeek).

The Australia–China trade relationship managed to buck some negative trends in 2024. China lifted tariffs on Australian wine and ended import bans on beef and lobster, effectively ending the active Chinese-initiated economic coercion of Australia underway since 2018. The problem is that it’s a mistake to view coercion as existing only once punishment begins—if the threat of punishment results in one not taking action, then that’s still coercion. And it reflects the state of China’s relationship with Australia, and many others. Beijing removed the economic measures only after Australia suspended two WTO cases, which allowed Beijing to save face from what would have been clear international rulings that China had engaged in unfair trade practices against Australia. Notwithstanding the compromises made by Australia, those developments were significant. China is Australia’s number one two-way trading partner; nearly a third of Australia’s exports went to China in 2023.

Although the ending of bans offers the perception of relief, failure to discern between China’s intent and capability—not just in the economic domain, but across the military, diplomatic and technological domains—puts Australia at risk.

China’s actions, not its words—especially in our own region—should drive our choices. From talking points to policy, Australia’s strategic narrative on China has so far been narrowly fixed in terms of Beijing’s apparent intent. The challenge for an incoming government is to shift that focus to China’s capability.

That doesn’t preclude ‘cooperation’ with China where we think we can and should cooperate, but due diligence must be undertaken. Too often, policymakers and politicians use climate change as the easy example of where we should aim to cooperate but fail to acknowledge that China is the largest emitter of carbon dioxide and that, in all likelihood, cooperation with China on issues such as renewable-energy technologies means facilitating China’s systemic use of modern slavery in regions such as Xinjiang. The key is to ensure that our own decisions don’t constrain our future choices as the price Australia pays for stable or cooperative ties with China.

Crucially, Australia shouldn’t limit itself to only being able to ‘disagree where we must’, but rather disagree where we should for national security and sovereignty. That requires a response framework that focuses in equal measure on ‘prevention’ (minimising the conditions from which Chinese coercion can manifest), ‘protection’ (proactive measures to defend against adverse impacts of such coercion), ‘resilience’ (building capabilities to bounce back quicker where coercion is applied) and ‘deterrence’ (imposing costs collectively to deter the continued use of coercion).

Economically, that means we shouldn’t try to replace the decades-long complementarity of the Chinese and Australian economies. Instead, we should focus on:

—building greater diversification and conscious redundancy—with other regional partners and with Europe

—building the dynamism and productivity of our businesses, including through revised industrial policy settings and increasing adoption of technologies such as artificial intelligence (AI).

While China is Australia’s top trade partner on traditional measures, excluding foreign direct investment (FDI), the US is Australia’s other major trade partner, including FDI. So, it can’t be the case that China’s ranking means it dominates our thinking. With Japan, South Korea, India, the US and Taiwan ranked 2 to 6 (and 2 to 6 accounting for more than the 30% that’s China), we’re as economically dependent on the ‘allied’ powers as we are on China.

In scientific developments and critical technologies, most of our strategic partners—the US, Japan, Britain, the EU and South Korea—are larger and have globally competitive tech sectors they’ve spent decades building. In recent years, those areas have included AI, semiconductors, quantum computing and biotechnology.

By contrast, Australia largely remains a mid-sized mining and tourism–dependent economy with a low national spend on R&D (we sit below the OECD average). Building greater sovereign capability in our science and technology sector is needed to improve the shape and size of our economy, as well as its competitiveness. At present, we also poorly understand the industrial dependencies within our economy. That’s resulting in Australian industries becoming uncompetitive and disappearing. For example, the loss of nickel mines has killed fertiliser production. Building real resilience requires us to understand those complex interdependencies, to take more risks in responding (fail fast, but learn faster), and to build new trusted partnerships while strengthening existing ones.

The next Australian Government should therefore consider the following four strategies.

Reframing the ‘China’ challenge as a multigenerational national enterprise

Commence development of an integrated (public and classified) national strategy—embedded as a standing national enterprise. This needs to start from a holistic view of our national interests and our values to determine not just who we must trade with, but how we must trade with them, the undivided purpose being to make us both more prosperous and secure. We have long worked towards a liberal economic order governed by rules—free trade and free markets. The intent of this national enterprise is to not let China trade (or America First trade) water down our national commitment to a liberal economic order.

This national strategy should be enabled by an appropriately tailored whole-of-government coordination mechanism, potentially the reinvention of a dedicated Australian National Security Adviser role with a secretariat, as ASPI has recommended separately. And it should reflect engagement not just across the federal government, but with states and territories and across the economy, as well as think tanks and civil society.

The Prime Minister should give effect to this proposal by making a national address or statement detailing why such a reframing is critical, and then provide an annual account to parliament of progress against the strategy. That statement should speak plainly to the strategic challenges that confront Australia and the Indo-Pacific region and be focused on lifting public awareness and understanding. The purpose will be to alert, not alarm, and to be accountable for progress.

Behind closed doors, an incoming government should elevate systematic planning to identify points of vulnerability or potential leverage. That includes a review of Australia’s supply-chain resilience across sectors relevant to national resilience.

Embedding economic resilience

Complementing the 2024 Independent Intelligence Review’s call for ‘an uplift in intelligence support on economic security’ and a matching review of economic security policymaking architecture, appoint a Minister for Economic Resilience. This could be modelled on Japan’s approach to coordinating and implementing policies to make its economy more robust, more competitive and less vulnerable to external shocks—and which sits as a crucial component of Japan’s overall national-security strategy.

The ministerial portfolio would involve, among other functions, a focus on:

—securing supply chains (particularly for essential goods and technology); that includes diversifying supply sources, promoting domestic production and reducing reliance on potentially vulnerable foreign suppliers

—safeguarding sensitive technologies and intellectual property from foreign interference or leakage; that includes protecting patents and restricting export of strategically important technologies

—driving a coordinated effort to rebuild manufacturing capability and rethink the industrial ecosystem that drives innovation and productivity; that includes building an understanding of industrial dependencies within our economy where investment is necessary for real resilience.

Enabling this would be a redesign of cabinet decision-making processes through the introduction of an advisory framework that better supports cross-cutting decision-making at the intersection of economic prosperity and security, ensuring that the objectives in each domain are rigorously assessed against the impact in the other. That would require a greater focus within the Australian Public Service on developing ‘dual skilled’ personnel who are equally proficient and capable in economics and in national security.

Blocking a ‘G2’ world

Reinvest in collective action to push back on the risk of a ‘G2’ world, in which the fate of Australia and the region is decided exclusively in Beijing and Washington. The current government has pointed to a multipolar diffusion of power in East Asia as an ideal; that is, while there are two great powers, multiple countries retain global influence and impact.

That should indeed become a more explicit strategic objective, but we also need to recognise that a world of multiple influential nations without an architecture for a rules-based order would be just as bad for Australian security and prosperity. Historically, the US and Europe have been the ‘global police forces’ of the rules-based system. We need to adapt our approaches to ensure that they remain ‘fit for purpose’. That requires Australia to commit to even closer relations with Europe, Japan, the ROK, India and the non-aligned world to drive an agenda of purposeful and tangible reform to the rules-based system.

Doing so also requires the development of a ‘strengthened deterrence’ strategy that reflects the reality that the trans-Atlantic and Indo-Pacific no longer exist as distinct geographical locations. The longstanding judgement that authoritarian regimes don’t trust each other enough to work together is no longer accurate. Countering one adversary now requires addressing the influence of the other.

Enhancing competitive edge

Implement a two-pronged approach that attracts our best and brightest in emerging technologies back home from places such as Silicon Valley, while also offering fast-track visas to top US-based scientists and researchers who are newly out of a job or low on the funding they need to keep their start-up or scientific lab running. All would provide shared benefit to our alliance with the US and close partnerships.

Complementing that would be the implementation of a comprehensive strategy to create an Australian AI ecosystem that drives innovation and enhances economic competitiveness—ensuring Australia’s place higher in the value chain. The UK Government is pursuing such a strategy. That includes driving AI adoption through investments in infrastructure, talent and R&D, while also establishing a flexible regulatory environment and actively encouraging both domestic and international investment in the sector. There’s a focus on sector-specific regulatory approaches, empowering existing regulators and promoting the UK as a global hub for AI innovation and safety. That’s a valuable approach for Australia to consider.

Flexibility and awareness will help India deal with Trump (again)

India navigated relations with the United States quite skilfully during the first Trump administration, better than many other US allies did. Doing so a second time will be more difficult, but India’s strategic awareness and manoeuvrability will help it work with Donald Trump’s America once again.

The chaotic early months of the Trump administration have shown Washington’s partners that they must carefully navigate relations with the US for the next few years.

Indo-Pacific partners will likely fare better than European ones, as China appears to be a key and continuing concern for the US. And among Indo-Pacific partners, India probably stands to do better than others. India generally and Prime Minister Narendra Modi in particular show strong understanding of the game when they refrain from reacting to Trump’s negative comments.

This is unusual: the Modi government has usually been somewhat sensitive to outside criticism. Modi may be looking to the day when Trump moves on from whatever unpalatable comments he makes.

The bilateral relationship saw impressive wins during the first Trump administration. The US changed the name of its Pacific Command to the Indo-Pacific Command, acknowledging of the growing strategic role of India in the region. The US also granted India Strategic Trade Authorization Tier-1 status. This provided India with license-free access to a range of military and dual-use technologies and was a clear recognition of the enhanced confidence in US-India strategic partnership. As well as this, India developed and maintains multiple tracks of engagement with the US, including through its national security advisor, affording it greater flexibility.

There were also minilateral successes, with the Quad’s rejuvenation recognising India’s importance to the US. Many of the improvements made during the Trump administration were further strengthened under Joe Biden’s presidency.

On the other hand, Russia’s invasion of Ukraine put India in a difficult situation because of New Dehli’s traditionally good relations with Moscow. India was unhappy with Russian President Vladimir Putin’s naked aggression, but also reluctant to abandon its old partner, leading to some unhappiness in Western capitals with what was seen as India’s hypocrisy. In part, India’s reticence to upend its relationship with Russia was due to a lack of confidence that the US’s shift to New Delhi (and away from Beijing) was permanent—a view that other US allies may now understand better than they did.

Trump and his administration appear to favour a transactional approach to dealing with the Putin regime. This is causing concern for the US’s NATO allies while also making it less likely that the US will pressure India on its relationship with Russia. New Delhi can likely breathe easy on this point for the next four years.

But Trump’s tariff pressure presents other challenges. In the previous term, India managed to satisfy Trump with a few concessions alongside general goodwill and ideological messaging. This time, Trump is clearly much more determined and focused, especially on countries like India with which the US has a significant trade deficit.

This will likely be harder for India to manage this time around. India will have to concede much more, but it still has options to satisfy Trump. India may be helped by the fact that the initial tariff roll-out has been chaotic and confusing, with tariff rates and targets being changed seemingly every day.

Most tariffs have been postponed for few months, and the US is welcoming offers to negotiate bilateral trade agreements. This gives New Delhi a chance to once again use its diplomatic skills to secure a reasonable deal with Washington. Amid US-China tensions, India will also be acutely aware of the opportunities presented by Trump’s increased focus on China’s unfair trade practices.

India has room to manoeuvre. For example, automobile tariffs are one of Trump’s key focuses. Indian tariffs on direct automobile imports are high, at more than 100 percent. New Delhi appears reluctant to lower them, partly because of fears that it could hurt India’s thriving domestic automobile and auto parts manufacturing sector.

However, India will not be an easy market for US automakers to break into, even with low or no tariffs. Both General Motors and Ford, who had entered the Indian car market and established factories in India to compete more effectively, found that not all their products well suited the market. Even if India removes tariffs, it is difficult to imagine US manufacturers competing effectively in India.

Similarly, India has some options on the energy front too to entice Trump. India’s external affairs minister, Subrahmanyam Jaishankar, recently suggested that India might amend its nuclear liability law, which has prevented the US entities from entering the Indian nuclear sector.

US nuclear engineering company Westinghouse planned to build nuclear plants in India until a bill passed in 2010 imposing such onerous liabilities that it effectively prevented new plants from being built. If India does change the liability law or its provisions, it could stimulate not only the US nuclear power industry but also its own nuclear sector.

India could also buy petroleum from the US, reducing its trade surplus with the US of nearly US$50 billion and pleasing Trump.

India’s annual oil import bill is now well north of US$100 billion and will only increase. Redirecting purchases to the US would have negligible effect on the Indian economy.

Finally, India could buy more weapons from the US. Trump does appear to want to sell more US weapons, and India needs to keep buying as it faces a growing threat from China. There has already been some talk of the US offering Lockheed Martin F-35s.

Though dealing with Trump may be difficult, New Delhi does have some options, especially if it keeps turning the other cheek to his criticism. The Indian government does appear to recognise the need to keep Trump happy. This combination of strategic awareness and room to move may help India to manage the second Trump administration better than other US partners do.

The Spirit for Australia: why Canberra should pursue the B-2 bomber

China’s recent naval circumnavigation of Australia has highlighted a pressing need to defend Australia’s air and sea approaches more effectively. Potent as nuclear submarines are, the first Australian boats under AUKUS are at least seven years away. Air power is well-positioned to fill the gap in Australia’s long-range strike capability: it has clear advantages over submarines and ships in terms of its responsiveness in the maritime strike role.

But the F-35A Lightning and F/A-18F Super Hornet lack the necessary range, and Australia has not fielded a bomber since the F-111 was retired in 2010. No new candidate aircraft has been identified as available for purchase on a timeline that is relevant or on a budget within Australia’s means.

Solving this problem requires imagination from Australia as well as its key ally, the United States. Fortunately, there is a solution at hand, but, like the aircraft itself, it is not easy to detect. As unlikely as it sounds, Australia should pursue acquisition of US B-2A Spirit bombers, and it has a narrow opportunity to do so.

Australia, to be clear, would be acquiring the B-2A as a fully sovereign capability, to boost its deterrent and war-fighting capabilities, with China’s strategic challenge primarily in mind. The US would also gain by further enabling a close ally to make a stabilising contribution to the regional balance of power, through a significant augmentation to its air power, alongside the development of undersea and other capabilities via AUKUS.

The B-2A is well suited to meet Australia’s capability requirements in terms of range, payload and stand-alone platform survivability. There are indications that the B-2A is already transitioning to a long-range precision strike role—delivering such weapons as the AGM-158B JASSM-ER, with which it was integrated in 2022. Maritime strike was a particular focus of the B-2A’s participation in last year’s RIMPAC exercises, when it demonstrated the use of modified JDAM gravity bombs as low-cost ship-sinkers. These are capabilities the Royal Australian Air Force already fields.

Obviously, Australia would need to clear some major obstacles to acquire the B-2A.

First, the US has never before entertained exporting the Spirit, given its limited numbers (only 18 remain) and proprietary technology. Second, Australia would be concentrating a multi-billion-dollar investment into very few platforms, just when the Australian Defence Force arguably needs to pivot away from exquisite capabilities and inject greater mass, depth and risk-worthiness into its order of battle. Third, the B-2A serves the US Air Force in a nuclear as well as conventional delivery role, which would have to be reconciled with Australia’s prohibition on possessing nuclear weapons. Finally, Australian critics of the Trump administration would pillory such an acquisition as foolhardy, at a time when doubts about Washington’s political reliability as an ally are peaking.

Without dismissing these drawbacks, there is a pathway for Australia to acquire a viable B-2A bomber capability and on a timeline that is relevant to its strategic needs. And the window of opportunity is relatively slim—requiring decisive action by Canberra within the next couple of years.

Why Not Other Aircraft?

What about other options? There are really only three other avenues, all with significant downsides: buying into the US’s future B-21 Raider program, acquiring B-1B Lancer bombers as they are retired from the USAF, or trying to tie into the British-Italian-Japanese GCAP fighter effort.

While it would provide a capability for the long term, the problem with the B-21 option for Australia is that it conflicts with the USAF’s overriding need to recapitalise its own bomber force. It would therefore not be available until well into the 2030s—if at all. Cost is another factor, at an estimated US$16-18 billion for a squadron of 12. And while the B-21 remains laudably on track, indeed under-budget in the FY25 appropriations request, the potential for cost overruns and delays remains.

The main advantage of pressing used USAF B-1Bs into Australian service is that the Lancers are flying now and are already configured for anti-ship missions. The major downside is that the RAAF would have to assume the full burden for the B-1B’s sustainment while the USAF pivots resources to the B-21. Designed for an operational lifespan of 8,000-10,000 flying hours, the B-1Bs now average above 12,000 hours because of the aircraft’s extensive use as a loitering close air-support platform in Iraq and Afghanistan, and the USAF has retired them from all but short-duration missions. While statistics on flying hours aren’t publicly available for the B-2A, the USAF has been much more sparing with them than the B-1B. Australia would be investing in the B-1B at the point of sharply diminishing returns.

The GCAP joint venture aircraft, while not strictly a bomber is likely to be large enough to be considered in the long-range strike role. Australian interest in the program is rising and GCAP is likely to be more affordable than the B-21. But it may not be available on a significantly more favorable timeline, and there is a constant concern that the multi-national nature of the program could lead to delays or spiraling costs.

Meanwhile, the Spirit is already on borrowed time in USAF service, as it will be retired (along with the B-1B) in the early 2030s in order to accommodate the transition to the B-21 without expanding the overall size of Global Strike Command. Although a precise date is difficult to identify, provided the B-21 rollout proceeds smoothly, the USAF could potentially start retiring B-2As at the end of this decade without reducing its overall bomber fleet. (While the USAF has previously stated it could keep the B-2As flying into the 2040s, Northrop Grumman’s $7 billion contract for B-2A maintenance and support concludes at the end of 2029.)

Retiring the B-1B and B-2A in parallel (the venerable B-52 will be retained in service) creates an expensive and burdensome disposal problem for the USAF. Framed in this context, an Australian pitch to buy eight or more B-2As could be well received by both the USAF and the Trump administration, which has emphasized the need for stepped-up burden sharing from allies.

How This Could Work

Make no mistake, this would be a costly effort, one that would have to come as part of a significant uplift in defense spending, to closer to 3 percent of GDP, from roughly 2 percent GDP today. But if the government is willing to do that, then there are mutual benefits for both Canberra and Washington.

Australia has upgraded several air bases to support regular deployments of USAF bombers and other combat aircraft, and B-2As have already operated from Australia, albeit on short-term detachments. An Australian base in the Northern Territory was used to support a B-2A strike mission against Houthi targets in Yemen last October, most likely for refueling.

Future B-2A deployments to Australia could be scaled up, to further explore the practical challenges of maintaining and sustaining these aircraft here. Deep maintenance might still have to be done in the US, and Australia would need to support that part of any agreement. But as the USAF transitions towards the B-21, Australia could incrementally take on more of the funding for B-2A maintenance, easing the cost on American taxpayers. Assuming some overlap in the sustainment footprint between the B-2A and B-21, the RAAF and USAF could also develop shared support facilities in Australia for Spirits transferring into Australian service as sovereign assets as well as for B-21s which the USAF could begin to forward deploy to Australia around the same time. This promises economies of scale within an alliance framework.

While the B-2A would be a stopgap capability for Australia, a further advantage of operating it is that it would provide the RAAF with a pathway to transitioning to the B-21, if it eventually becomes available in sufficient numbers for the US to consider exporting it to Canberra.

To assuage anti-nuclear concerns in Australia, the systems that allow the B-2A to carry nuclear weapons could be disabled through software changes that conform to RAAF standards. Similarly, adapting the B-2A for anti-ship weapons, such as the AGM-158C LRASM, could be done without insurmountable delays.

All this would require a major Australian diplomatic effort to persuade Washington that it can be trusted to safeguard such highly prized stealth and other technologies via a foreign military sale. But the precedent created by AUKUS, Australia’s subsequent ITAR carve-outs and the existing, close relationship between the RAAF and USAF would do much to make this transfer practicable.

Yes, it’s wildly ambitious. Yes, the hurdles to making this happen may simply be too many to overcome. But now is the time for Canberra to be contemplating bold moves, and convincing the US to sell the B-2A would transform Australia’s defense posture on a significantly faster timeline—an effort worth pursuing to meet the gathering threats.

A successful COP31 needs Pacific countries at the table

Australia’s bid to co-host the 31st international climate negotiations (COP31) with Pacific island countries in late 2026 is directly in our national interest. But success will require consultation with the Pacific.

For that reason, no final decision should yet be made on which Australian city hosts COP31—particularly because this week’s announced preference to host it in Adelaide appears to have taken the Pacific climate community by surprise. Adelaide isn’t on the Pacific.

By making this announcement, Australia sent the wrong message to its potential Pacific co-hosts, and if collaboration goes ahead, there will be many more choices and investments to make.

To be clear, Australia should maintain its bid for COP31. Australia’s leaders need to grasp that hosting COP31 is a strategic win for Australia, but how it does so matters. It is an opportunity to build and strengthen relationships with the Pacific community at a crucial time in the region, given key partners such as US are withdrawing and competitors such as China are advancing.

Going forward, Australia should define COP31’s success in terms of strengthening its relationships with Pacific island countries. Failure, not just for COP31 but for Australia’s interests in the region, will come from decisions that work against those relationships

Viewing COP31 from a domestic policy perspective is a mistake, yet that is how Australia’s leaders appear to be approaching it. It is instead a much wider strategic investment aimed to firm up Australia’s Pacific partnerships on climate and security.

Australia’s narrow approach includes framing the rationale of hosting COP31 around the cost of the event. It’s right for federal and state governments to be prudent about practical aspects when it comes to choosing a host location for such a large event, but thinking of it solely in those terms ignores the important strategic benefit of hosting in the first place. Preparing for an event of this scale comes at a cost, but in purely narrow local economic terms, hosting COP26 in Glasgow netted more than $1 billion in benefits for Britain.

It may well be that the South Australian government was more interested in hosting than the Queensland or New South Wales governments—both of which make more sense logistically for Pacific participation. South Australia has advanced renewable energy deployment at a great scale. Hosting COP31 would allow it to showcase its efforts and domestic industry. But with co-hosting being a strategic priority, these decisions should be made in consultation with Pacific governments.

Again, potential economic benefits should not be the main driver of decisions around hosting COP31. Our aim should be to jointly advance Australian and Pacific interests in the region.

Australia and its Pacific partners should prioritise the development and advancement of a COP31 agenda defined by key regional concerns. On climate, we are all digging ourselves further into a hole. Australia should work with Pacific partners to reframe climate discussions around addressing those fundamental risks.

Rapid reductions in greenhouse gas emissions are crucial for the survival of many low-lying islands and regions, including in Australia. Equally, we are behind on adapting to and preparing for climate effects, limiting our ability to mitigate. Global climate finance is seeing even more regression: the gap between what countries need and what will be delivered is widening, just as global investments in development and resilience are dropping.

COP31 is an opportunity for Australia to shift regional views of its approach to climate and security. It’s a chance to demonstrate to Pacific leaders that Australia legitimately wants change and is willing to make sure the Pacific voice is heard. To do this well, it needs the support of Pacific countries who have proven time and time again that their voices are worth hearing.

It is still a long road to hosting COP31. Turkey’s competing bid remains active, and the next decision on Australia’s bid will take place this coming June. But if Australia does not secure Pacific support ahead of that vote, it won’t just be harder to land the bid; it will also be less worthwhile, and the damage to our Pacific relations will hurt our regional interests.

Donald Trump’s first three months: rude, raucous and rogue

Sunday marks three months since Donald Trump’s inauguration as US president. What a ride: the style rude, language raucous, and the results rogue.

Beyond manners, rudeness matters because tone signals intent as well as personality.

Trump’s version of going rogue means to leave the herd, or to become savage or destructive. His rogue is about means and policy, shifting where the United States stands and what it stands for.

Manners maketh the man, but means maketh government.

Berating Ukrainian President Volodymyr Zelenskyy in the White House was the rough and rude stuff politicians usually do to each other behind closed doors. The rogue moment of policy significance and shocking symbolism was at the United Nations when the US sided with Russia in voting against resolutions to mark the third anniversary of the full-scale invasion of Ukraine. Trump embraces foes as he throws friends overboard, aiming for a quick peace in Ukraine by giving Russian President Vladimir Putin most of what he wants.

The US president is driven by his will, his wants and his whims. The only metric that counts is power. Get a great deal. Make a profit. Punish enemies.

Trump calls his tariff wall a ‘declaration of economic independence’ that will make the US ‘good and wealthy’. Offering a ‘stupidity theory of tariffs’, Nobel Prize economist Paul Krugman responds that Trump launches ‘a global trade war’, destroying 80 years of credibility in three months with ‘wild zig-zags’.

What’s so challenging about Trump’s style is that zig-zags are the strategy.

The US sets a 145 percent tariff on China’s goods; China’s answers with a 125 percent tariff on US goods. The world’s top two economies impose embargoes on each other. Trump may, indeed, zig to clinch a beautiful deal with China. But the isolationist and nativist standard is set. Trump believes that for decades the US ‘has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike’.

The US had the largest role in creating today’s world; under Trump the US is scared of the world it made, declaring a pox on Pax Americana.

Trump’s three months show he has learnt from his first term, when the adults in the room were a constant check on his will and whims. A more experienced president leading his remade Republican Party means fewer adult restraints.

Trump’s new treasury secretary, Scott Bessent, qualified for the adult label by getting the president to put a 90-day pause on the reciprocal tariffs announced on 2 April, because the bond market was melting. Wall Street, though, speculates Bessent won’t last long, because the first Trump administration showed that telling adult truths to the wild king soon ends cabinet careers.

Trump now attacks the foundations of Washington to get systemic shifts. He smashes so his vision can arise atop the rubble. In contrast, during the first-term soap opera, courtiers vied to handle the king while Washington kept ticking (many administration jobs were still vacant a year after Trump’s first inauguration).

The president luxuriates in the pomp, while his administration wields sharper authority. He still enjoys the king label, but the court politics forms factions.

Because loyalty is what Trump values most, the true-believer faction gathers around the MAGA cap that reads ‘Trump was right about everything’.

Standing amid the believers are those who see Trump as the perfect instrument to ‘burn down Washington’, as per the original subtitle of a book by the head of the Heritage Foundation on how to institutionalise Trumpism by torching institutions. The foundation created Project 2025 to write the conservative agenda for Trump’s administration ‘to take down the Deep State and return the government to the people’.

The tech bros, led by Elon Musk, want Trump to remove any Washington restraints so algorithms can get on with eating the world. The tech bro discomfort over trade war was voiced by Musk’s attack on Trump’s tariff tsar, Peter Navarro, as ‘dumber than a sack of bricks’. The tech vision of a borderless world crashes against Trump’s love of borders.

The China hawks fly with Secretary of State Marco Rubio and National Security Advisor Michael Waltz. Rubio’s version of Trump foreign policy starts by stating that the post-Cold War period of US unipolar dominance was an ‘anomaly’. Now, Rubio says, the US faces ‘a multipolar world, multi-great powers in different parts of the planet. We face that now with China and to some extent Russia, and then you have rogue states like Iran and North Korea you have to deal with.’

The view that the US is no longer as powerful as it was is Trump’s central argument. His answer is America First. The fear for allies is the prospect expressed by Australia’s previous ambassador to the US, Arthur Sinodinos, that this might become America Only.

Taiwan: the sponge that soaks up Chinese power

Taiwan has an inadvertent, rarely acknowledged role in global affairs: it’s a kind of sponge, soaking up much of China’s political, military and diplomatic efforts. Taiwan absorbs Chinese power of persuasion and coercion that won’t be directed elsewhere while the island remains free.

This means that supporting Taiwan is not merely a moral stance in favour of democracy; it is a strategic and economic necessity. Taiwan’s independence from China anchors the regional order—and maybe even the global order. While it remains separate from China, Beijing is delayed in shifting attention to new, potentially more dangerous fronts.

Every leader of the People’s Republic of China—from Mao Zedong to Xi Jinping—has made ‘reunification’ a non-negotiable part of the party’s mission. Xi has tied Taiwan’s future directly to what he calls the ‘Chinese Dream’ of national rejuvenation. Unification is ‘essential’ to achieving China’s rise as a great power, he says. Party officials have referred to Xi Jinping as the ‘helmsman’ guiding China’s national rejuvenation.

The intensity of this focus is obvious. The Chinese armed forces have made preparing for an invasion and occupation of Taiwan their top strategic priority, developing a vast arsenal of missiles, air and naval forces designed to overwhelm the island’s defences and deter US intervention.

Military exercises simulating blockades or invasion have become normalised. In 2022, just over 1,700 Chinese military aircraft flew into Taiwan’s de facto air defence identification zone, twice as many as in the previous year. In 2024, that figure was more than 3,000. As the graphs below show, in 2024 Chinese aircraft and seafaring vessels were spotted around Taiwan on all but five days of the year. The exceptions were caused mostly by typhoons in the area.

China’s military and paramilitary activities around Taiwan in 2024. Source: ASPI’s State of the Strait Database.

And alongside this military pressure, Beijing wages an unrelenting pressure campaign to isolate Taiwan internationally, intimidate nations that support it and subvert Taiwanese society. This sustained, multi-domain strategy of intensifying coercion reflects just how much of China’s political and strategic bandwidth Taiwan consumes.

China devotes enormous resources to keeping Taiwan under pressure. The Taiwan issue so dominates Beijing’s strategic agenda that it slows, redirects, and tempers other assertive behaviours: it has fewer resources for other domains, including in the South China Sea, along the Indian border, in Africa and in the Pacific islands.

If unification remains the regime’s priority, Beijing must be cautious not to unnecessarily provoke crises elsewhere that could derail its Taiwan plans. Military adventurism in the East China Sea or South China Sea carries the risk of triggering a conflict and diverting resources that might undermine China’s ability to seize Taiwan. So, Taiwan’s function as a sponge for China’s attention is also a check on broader aggression. Beijing would be more emboldened to pursue its other strategic priorities if Taiwan capitulated.

There’s also a domestic angle. The Chinese Communist Party uses Taiwan to fuel nationalist sentiment, to justify defence spending instead of fixing an economy weighed down by structural issues, and to distract from other internal challenges. If the Taiwan issue were solved, the regime would need a new outlet for this energy—potentially one more dangerous for China’s neighbours.

Policymakers must ask a sobering question: what happens if Taiwan is annexed by China? This would not satisfy Beijing’s appetite but rather embolden it. Absorption of Hong Kong has only freed up more resources to focus on coercion of Taiwan.

With Taiwan under its control, China would gain a crucial forward base for power projection. Its navy would have more available resources to operate in the Pacific, threatening shipping lanes and enforcing the rights of internal waters within the Taiwan Strait. China could pressure Japan more aggressively over the Senkaku Islands or enforce dominance in the South China Sea. The Philippines, just south of Taiwan, would be more vulnerable to Chinese coercion.

Moreover, the psychological impact of a Chinese victory would ripple across Asia. US allies might question Washington’s resolve. Smaller countries might accommodate Chinese influence to avoid becoming the next target. The delicate balance of power in the Indo-Pacific would tilt—not towards peace, but towards authoritarian dominance.

Policymakers in Indo-Pacific capitals need to send a clear message: maintaining the status quo in the Taiwan Strait helps preserve the broader stability of the Indo-Pacific. Conversely, abandoning Taiwan would not end China’s expansion; it would accelerate it.

Taiwan may be small in size, but it plays a disproportionate role in shaping Asia’s future. So long as it remains a sponge for CCP attention, the rest of the region has a chance to stay dry.

Women in combat roles strengthen our defence force

The Ukraine war has been called the bloodiest conflict since World War II. As of July 2024, 10,000 women were serving in frontline combat roles. Try telling them—from the safety of an Australian lounge room—they don’t belong there. But that’s exactly what the now disendorsed Liberal candidate for Whitlam, Benjamin Britton, did last week when he doubled down on his claim that women didn’t belong in combat.

The idea of women in combat is not new; it dates back centuries. That this topic has re-entered mainstream political debate is dangerous and damaging. It risks undermining the morale of our defence force and stoking a culture war at precisely the moment when we should be focused on enhancing capability.

National security is a bipartisan priority, with both sides acknowledging the strategic uncertainty Australia faces: war in Europe, instability in the Middle East and China’s assertiveness in the Indo-Pacific.

Yet instead of strengthening our defence capability, recent political discourse risks undermining it. The resurfacing of comments from Britton—calling for the removal of women from combat roles to ‘fix the military’—and a 2018 interview in which opposition defence spokesman Andrew Hastie claimed the ‘fighting DNA’ of close combat units was ‘best preserved when exclusively male’ do exactly that.

It’s important to clarify what combat roles actually entail. These are positions that engage directly with enemy forces—traditionally found on warships, in fighter aircraft and on the battlefield. But as the character of war has evolved across the five domains—land, sea, air, cyber and space—so too has the nature of combat. The lines are increasingly blurred, exemplified by growing recognition of drone operators as combat roles. Today, defining a combat role is far less clear-cut than it once was. Which only reinforces how ludicrous it is to exclude 50 percent of the Australian population from these roles.

Australia’s journey towards fully integrating women has been a long one. Women have proudly supported Australian military operations since the Boer War in 1899. In 1990, the chief of navy lifted restrictions on women serving at sea, with Royal Australian Navy women deploying in frontline roles during the Gulf War aboard HMAS Westralia. By 1998, the navy allowed women to serve on submarines.

In 1992, most Australian Defence Force roles were opened to women, with only a few exceptions remaining: clearance divers, combat engineers, infantry, artillery, airfield defence and special forces.

In 1992 the Royal Australian Air Force opened fighter pilot roles to women, though uptake has been slow because of cultural barriers rather than capability. Yet even before that, in 1990, female RAAF pilots were already flying C-130s in combat-related roles, and by 2000 women were serving as navigators in Australia’s F-111 strike aircraft.

While admittedly the nature of conflict across the domains is different, these are combat roles where women’s lives are on the line and the sacrifices are just as real.

The journey towards the inclusion of women in land combat roles in Australia has been slower. While ADF women have made key contributions to peacekeeping missions since the 1990s, it wasn’t until 2011 that the formal ban on women serving in land combat roles was lifted, followed by special forces roles in 2014.

This was despite the first woman earning her commando green beret as early as 1981 and women serving as combat medics alongside special forces in Afghanistan before the policy change.

But what of Britton’s specific comments? Setting aside his apparent misunderstanding of the broad range of combat roles, he expressed concern about ‘women’s hips’.

It’s true that studies in Australia and Britain have found that body armour designed for men can have adverse physical impacts on women. But these same studies conclude that such issues can be resolved through improved design. It’s not a reduction in protection, just a redesign to fit the body it’s intended for.

And what about the success rates of women in these physically arduous roles? In 2018, the director of workforce strategy for the army told a parliamentary committee that attrition rates for women in combat roles were broadly the same as those for men.

Likewise, the proportion of applicants, male and female, who fail to meet the physical employment standards for these roles shows no significant gender difference.

As for the so-called fighting DNA of close combat units—I’ve never served in land combat—it’s an experience that deserves the respect of a grateful nation. But based on my operational experience, from service at sea during the second Gulf War to chasing armed drug smugglers in the Caribbean, I can say this: the fighting DNA of a warship is strengthened, not weakened, by diversity of all kinds—including gender.

Australia faces the real prospect of conflict in our region. Faux culture wars such as this serve only to distract from the serious task of preparing our defence force for the challenges ahead.

China targets Canada’s election—and may be targeting Australia’s

Following Canadian authorities’ discovery of a Chinese information operation targeting their country’s election, Australians, too, should beware such risks.

In fact, there are already signs that Beijing is interfering in campaigning for the Australian election to be held on 3 May.

In Canada, China evidently prefers the Liberal government of Prime Minister Mark Carney to the Conservative opposition. In Australia, we are seeing messaging against Opposition Leader Peter Dutton—suggesting that Beijing wants the Labor government of Anthony Albanese to be re-elected.

The Australian Secret Intelligence Organisation and the Australian Electoral Commission are cooperating to guard against China’s now well established habit of trying to shape foreign elections.

For Australian voters, especially those consuming media in languages other than English, the information environment is crowded and contested. Overtly, there are foreign official state channels (communications by foreign governments) and state-controlled outlets (those funded and editorially controlled by foreign states).

Covertly, there are attributed and non-attributed channels. Attributed channels operate under foreign state oversight without publicly disclosing affiliation. Non-attributed channels aren’t directly linked to foreign states, but are nonetheless aligned. The interwoven and reinforcing nature of these channels is part of the cause for concern, particularly as they operate outside regulatory or journalistic oversight.

Politicians usually refrain from commenting on foreign elections, though Papua New Guinea’s foreign minister this week raised eyebrows by saying he personally hoped Labor would win Australia’s. China’s interference is different to such one-off instances: it’s persistent, widespread and surreptitious.

Indicative sample of state-affiliated entities, it is not an exhaustive list. Source: 3rd EEAS Report on Foreign Information Manipulation and Interference Threats Report, March 2025.

In early April, Canada’s Security and Intelligence Threats to Elections (SITE) Taskforce revealed that a  Chinese-language influence campaign backed by Beijing was targeting Chinese-speaking Canadians on the popular multi-function app WeChat. The messaging promoted Carney as a strong statesman, subtly framing him as a leader more capable of managing relations with the United States.

The taskforce found that the campaign originated from Youli-Youmian, a popular WeChat news account, which Canadian intelligence linked to the Chinese Communist Party’s Central Political and Legal Affairs Commission. The authorities had also picked up on the account in June 2023 and January 2025, when it targeted other members of parliament. This time the authorities found ‘coordinated inauthentic behaviour’—the use of a network of accounts to amplify a narrative disguised as organic public opinion. This activity peaked in March.

This tactic mirrors a developing pattern of Chinese electoral influence, where efforts are not always confrontational but rather cloaked in affinity and praise. Unlike the older image of disinformation campaigns as combative, these efforts are subtler. They don’t necessarily involve falsehoods and are not sought by the candidates themselves. This makes detection, let alone public consensus on countermeasures, more difficult.

In contrast, China-supported messages targeting Australia’s federal election have taken an overtly critical form. They often show up on state-aligned media, such as the Global Times, and on Chinese social media platforms, such as Rednote and WeChat.

For example, in response to Dutton’s concern a Chinese research vessel might be mapping Australia’s undersea cables, the Global Times accused Dutton of ‘beating the drums of war’ and using China as a political wedge in the election campaign. The editorial, which was also reposted in China Military news, took aim at what it framed as ‘paranoia’ and ‘double standards,’ pointing out that Australia’s own naval activities in contested waters, such as the Taiwan Strait, were not similarly scrutinised. Australian media outlets picked up this Global Times article and reported it widely, feeding directly into Australia’s public election discourse.

Screenshot showing Global Times article republished by China Military.

Screencap of 7 News coverage of Chinese state media articles.

Popular Chinese-language WeChat accounts have also amplified such narratives. One outlet, Australian Financial News (AFN) Daily, is a self-described financial media platform.  It recently published a series of highly circulated articles, collectively read more than 100,000 times, portraying Dutton as ‘a reckless, Trump-aligned figure unfit for leadership’.

Headlines included ‘Chinese people absolutely loathe him! If Dutton takes power, Australia will be in chaos!’ ‘华人极度讨厌！达顿上台后，澳洲大变!’ and ‘Completely doomed! Dutton’s rise will crash Australia’s housing market!’ ‘彻底完蛋！达顿上台，澳洲房价必将暴跌!’ Despite AFN’s nominal tie with Australia, its official account IP address traces back to an organisation called Changsha Aoxuan Culture Communication. The IP territory is registered to Hunan, China.

Example of headlines targeting Peter Dutton.

Official account information for AFNdaily in Chinese (left) and English translation (right).

China’s approach differs with local conditions. In Canada, efforts involve community-level micro-targeting through Chinese-language media platforms. In Australia, efforts have been at a macro level, with state media weighing in on elite political debates. But in both cases, the aim is the same: to seed confusion and divide public sentiment, ultimately reshaping policy trajectories in Beijing’s favour.

In the lead-up to the federal election, the presence of such narratives in Australia’s information environment may distort the truth at a sensitive democratic moment. Democratic resilience depends on transparency of the media and information environment. It’s increasingly requiring us to engage with new forms of information manipulation.

Ultimately, Chinese electoral influence reflects Beijing’s ambitions and tests the strength and self-awareness of democracies. By treating this challenge as either overblown paranoia or merely a problem for intelligence agencies, we risk missing the point. Our democracy and sovereignty require our elections to be based on Australian perceptions of what our politicians are telling us—whether truth, untruth or half-truth—not on what foreign adversaries such as China are secretly feeding us.

President Trump is redefining America’s international role, and Australia has influence

In the week of Australia’s 3 May election, ASPI will release Agenda for Change 2025: preparedness and resilience in an uncertain world, a report promoting public debate and understanding on issues of strategic importance to Australia. This is an article from the report.

President Donald Trump’s America is done with being taken advantage of by other countries and is demanding more from its adversaries, its partners and, above all, its allies. Decades of Australian cooperation with the US on defence, diplomacy, intelligence and trade have established the right relationships to get a seat at the deal-making table. Australia now needs to use that access to convince the US that Australia’s robust trade and economic strength, whole-of-nation leadership in the Indo-Pacific and investment in rules and institutions benefit US national security and prosperity.

With his election mandate to ‘Make America great again’, President Trump is redefining US global leadership through economic statecraft, diplomatic coercion and hard-power threats. That’s accompanied by a ruthless redefinition of US budgetary priorities to address what the administration sees as core domestic challenges: illegal immigration, a bloated public sector, underutilised manufacturing capacity, and burdensome private-sector regulations that stifle American industry. A key goal is to reduce the US national debt, which currently sits at around US$36.7 trillion and 123% of GDP.

Elon Musk’s Department of Government Efficiency (DOGE) is slashing government spending on the basis that for too long US taxpayer dollars have been spent on bureaucratic passion projects and not on making America ‘stronger, safer, and more prosperous’. Ninety-two per cent of the grants and programs of the US Agency for International Development (USAID) have been cancelled, including many providing emergency food and medical aid in crisis zones. DOGE is working to fire most of the more than 13,000 USAID staff and contractors worldwide. The plan is for the remainder (294 people, with just eight in the Asia Bureau) to be folded into the State Department.

The State Department itself has been told to prepare for a 20% cut to staffing numbers and the closure of some consulates (primarily in Europe), and the Pentagon has been told to find budget cuts of 8% for each branch, some of which will be redistributed to priority projects. Significant cuts are being made to other departments. DOGE has also been tasked to review the US Navy and Coastguard’s troubled shipbuilding programs.

The Trump administration is unilaterally redefining the global trade environment to address what it sees as unfair trade imbalances and overregulation of US tech companies, and to build US manufacturing capacity, increase revenue, and force burden-sharing. To do that, President Trump on 2 April imposed a global minimum 10% tariff on imports to the US and continues to threaten up to 50% ‘reciprocal’ tariffs on those countries he considers the worst offenders. These complement global tariffs on imports of steel and aluminium, some automobiles and auto parts (including on countries, such as Australia, that have trade deficits with the US) along with specific tariffs on its own neighbours—Canada and Mexico. The harshest treatment has been reserved for China. Goods from China, Hong Kong and Macao have been excluded from US de minimis duty free provisions, and tariffs have been added to total around 125%.Further complicating the picture, the US has excluded some essential products from the proposed tariffs, including copper, pharmaceuticals, semiconductors, some critical minerals and energy.

In maximalist demonstrations of ‘might is right’ coercive diplomacy, Trump has sought to whitewash President Putin’s invasion of Ukraine and demanded that President Zelenskyy be ‘more grateful’ for US aid. He wants Ukraine to provide the US with rare earths and hydrocarbons in exchange for a voice in peace negotiations and some semblance of US security support. Trump is siding with Israel, closing its eyes as the international community protests alleged Israeli war crimes as the US seeks to strong arm peace in Gaza. He has also made it clear that he thinks the US should control Greenland and the Panama Canal to manage security threats from Russia and China.

Members of Trump’s cabinet insist that those machinations are aimed at enabling a more focused and strengthened US position against a rising and malign China, including to weaken President Xi’s influence over Putin and other leaders. Others say that it shows that the US considers that it has no allies, just competitors. Trump’s comments from the Oval Office on 28 February 2025, when he said, ‘I’m not aligned with Putin. I’m not aligned with anybody. I’m aligned with the United States of America’, would seem to support the latter.

While many American allies, including Australia, would agree that China represents the pacing security threat and that action should be taken to constrain Beijing’s malign activities, running roughshod over friends is unlikely to achieve that goal. The Trump administration appears to be targeting China’s economic and technological influence but in a way that has no care for the impact on America’s allies and partners.

So, what can Australia do?

Australia should protect itself, while also investing in its friends, partners and the trade and security institutions that sustain its prosperity and security.

The majority of American voters, many of whom felt let down by the unfulfilled promises of globalisation and multilateralism, endorsed President Trump’s promise to put US domestic interests at the centre of its foreign, defence and trade agendas. That’s felt deeply among working- and middle-class Americans, has been growing for many years, and is likely to remain the case for some time. To remain influential with the White House, Australia must advocate for its national interest priorities within that frame, recognising that Trump’s America isn’t withdrawing from global leadership, but that it’s fundamentally redefining what it considers that leadership to be.

America First economic statecraft: tariffs, investment, trade

Recommendation: The next Australian Government should continue to push back against Trump’s imposition of tariffs on Australia, maintaining a clear message that the unjustified tariffs do hurt the bilateral relationship but won’t affect the security alliance or AUKUS. The government should simultaneously explain to the Australian public that the tariffs act is an unfriendly one to a long-time friend while showing the Trump administration that the relationship won’t break but will be strained until the tariffs are terminated. Ongoing discussions with the US should focus on the fact that a strong Australian economy with robust trade ties benefits US national security, as is true for other US allies. US tariffs on Australia and other actions that de-stabilise the global economy may reduce the government’s ability to increase defence spending and weaken its leadership in Indo-Pacific security. They could also dampen enthusiasm for Australian foreign direct investment into the US. Australians might oppose closer ties with the US if they feel subject to US economic coercion and, indeed, it’s already assisting Beijing’s narrative in the region that all major powers act this way. If the Trump administration is attempting to counter the rise of China, its action against Australia will help Beijing, not Washington. Australia should oppose all tariffs against vulnerable Pacific economies, including because the action provides ammunition to support China’s claims of US self-interest.

Trump’s administration should hold Australia up as showing what ‘good’ looks like—an incentive to all other countries to be more like Australia in consistently carrying a fair share of the economic and security burden.

By the Trump administration’s own ‘fairness’ metrics, Australia is in an enviable position. It’s maintained a 2:1 trade deficit in the US’s favour since the 1950s and has a free-flowing exchange rate. For the first 20 years of the Australia – US Free Trade Agreement, Australia levied no tariffs on US goods, while the US only gradually reduced tariffs on protected US goods, such as lamb. At a time when the White House has prioritised attracting sources of trusted foreign capital to grow US industry and infrastructure, Australia’s $4.1 trillion in superannuation funds looking for diversified long-term investment opportunities overseas add to Australia’s value.

As the 13th largest economy in the world, the prosperity of which has long been driven by free trade, Australia relies on a well-functioning, rules-based international trading system. A global tariff war that doesn’t distinguish fair trading nations from unfair ones undermines that system, disrupts supply chains and increases prices. The Trump administration’s tariffs on steel and aluminium impose direct pain on Australian companies selling into the US market, undermining their contribution to the long-awaited expansion of the US industrial base. The Australian Government must ensure that US partners recognise that those imports are critical for US supply chains, and that defence-grade steel supports the US Navy’s uplifted shipbuilding program and future AUKUS submarines. Similarly, specialised Australian aluminium building products are needed by US industry, particularly as the country rebuilds after multiple natural disasters.

Australia, as the 2025 chair of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (the members of which produce around 14% of global GDP) and as a member of the Regional Comprehensive Economic Partnership (the members of which produce about 42%), has a unique opportunity to coordinate the groups’ responses to the US tariffs and reaffirm member states’ commitment to free and open trade. Open and transparent leadership in those bodies, together with a close relationship with the Trump administration, will help to build Australia’s reputation as an influential partner of choice.

The World Trade Organization (WTO) has proven too weak to stop China flooding global markets with artificially low-cost exports to balance its weak consumer spendingor to make China stop bankrupting its competitors by manipulating the price of critical minerals such as nickel, lithium and cobalt. The previous Trump and Biden administrations had little interest in working to improve the WTO, blocking the operation of its dispute appellate body over concerns of judicial overreach. However, the current Trump administration’s desire to diversify its critical-minerals supply chains could offer a new opportunity to work with Australia and other like-minded partners in the WTO to curb China’s trade manipulation by modernising and strengthening WTO rules and procedures.

While challenging, the Trump administration’s tariffs on China are also an opportunity to reduce Australian business reliance on China and diversify supply chains. As Australian manufacturers and retailers seek alternatives to Chinese-made components, the Australian Government should incentivise Australian businesses to deepen their ties with ASEAN countries and with India, and resist accepting an influx of low-cost Chinese e-commerce diverted from the US market.

Australia should work with the Trump administration on implementation of its new America First Investment Policy, which is specifically designed to limit investment from adversaries, primarily China, and increase collaboration with allies and partners.

America First strategic policy: ‘Might is right’ or ‘Peace through strength’

Recommendation: Australia should encourage the Trump administration to collaborate on Indo-Pacific capacity building, infrastructure and security assistance to lessen regional dependence on China and blunt China’s influence activities in this key strategic theatre. Notwithstanding the shuttering of USAID, the US should honour its agreements and reform its tools of statecraft to enable agile and timely investment, including in partnership with the private sector on strategic regional infrastructure.

As part of that, Australia should offer to collaborate with the US (and others, such as Japan) to jointly fund Radio Free Asia and other critical development programs in our neighbourhood to help mitigate the effect of American budget cuts. Australia should also share with the US its experience of China taking over Radio Australia frequencies when the ABC ceased making short-wave transmissions.

Recommendation: To demonstrate Australia’s commitment to contributing to a secure, stable and prosperous Indo-Pacific, the new Australian Government should explain to the Trump administration that the 2024 National Defence Strategy and Integrated Investment Program are a 10-year demand signal for AUKUS defence and dual-use technology companies. It must also push ahead on quick wins for AUKUS Pillar II, focused on those aligned to the Trump administration’s priorities.

President Trump’s Inauguration Day directive to the Secretary of State called for US foreign policy to champion core American interests and put America and American citizens first. Despite that, Australia has more influence than many appreciate. The Trump administration’s first international meeting was of the Quad, held in Washington DC on 20 January, during which the US reaffirmed its commitment to strengthening a free and open Indo-Pacific. Secretary of State Rubio’s language about the Quad and the Indo-Pacific region contrasted strongly with the adversarial approach taken with Europe and NATO.

That regional focus concurs with early reporting that the Pentagon is to prioritise the work of INDO-PACOM and focus on the production and maintenance of Virginia-class submarines (needed for the US Navy and for AUKUS), and drones and counter-drone systems, in conjunction with key Trump election promises to secure the southern border and develop an Iron Dome–style missile-protection system. While they’re yet to get much media coverage, the strong protections in the America First Investment Policy against China gaining technological advantage from the US seem to confirm the administration’s focus on its only near-peer competitor.

The Trump administration clearly views its three Quad partners, Australia, India and Japan, as a net positive for US interests. From Australia’s perspective, that’s a legacy of President Trump’s first term, in which his focus on China saw him come to understand Australia’s strength in spending on defence and standing up to Beijing despite coercion. It’s possible, however, that the second Trump administration will also ask more of Australia, as US partners and industry push for assurances that Australia will continue to uplift its defence capabilities, invest in the AUKUS optimal pathway on submarines and see tangible outcomes from streamlined processes for AUKUS advanced capabilities.

President Trump’s pick for Undersecretary of Defense, Elbridge Colby, who respects Australia’s contributions on defence, wants Canberra to increase defence spending to over 3% of GDP. Regardless of the percentage, Australia should continually point to the US$3 billion investment that it’s making in expanding and modernising US shipyards, the progress achieved in training Australian submariners to drive Virginia-class nuclear-powered submarines, and the strategic benefits to the US from new submarine maintenance facilities in the Indian Ocean. Canberra should also highlight how increasing cross-fertilisation of Australian and US industry and manufacturing is adding resilience to US defence supply chains in the Indo-Pacific and that the 2024 National Defence Strategy and Integrated Investment Program are a 10-year demand signal for US, UK and Australian companies.

As the US seeks to counter Chinese influence in the Indo-Pacific, Australia should encourage the Trump administration to honour its regional development commitments and collaborate on further initiatives, notwithstanding the shuttering of USAID. Building off the success of the Australia–US–Japan Trilateral Infrastructure Partnership in funding undersea cables in the Pacific, which started with the first Trump administration, Australia can encourage US counterparts to adopt more innovative approaches to development and security. Key examples are the Falepili Union with Tuvalu (which provides Australia with strategic denial rights and Tuvalu with climate resilience monies and opportunities for migration), the agreement between Australia and Papua New Guinea (which encompasses development and security elements) and Australian Telstra’s acquisition of Digicel Pacific (the largest mobile provider in the Pacific, acquired amid rumours of interest from China Mobile).

The Trump administration’s interest in working closely with private-sector investors from allied countries offers an opportunity to take this work further, including to secure Indo-Pacific strategic infrastructure while delivering shared, sustainable, long-term returns on capital. Australia should encourage the US to reform its Development Finance Corporation and enable it to work in a more agile way with the Pentagon’s Office of Strategic Capital, the Australian Infrastructure Financing Facility for the Pacific and Japanese counterparts.

Australia’s unwavering commitment to a free and open Indo-Pacific, its willingness to confront Chinese assertiveness and its active participation in regional security initiatives, such as the Quad and the Trilateral Strategic Dialogue with the US and Japan, and its membership of the Pacific Islands Forum, contribute to a secure and stable environment conducive to US interests. The Trump administration’s prioritisation of the Indo-Pacific and desire not to cede influence to China presents an opportunity to have it lean into regional issues. In this vein, Australia should also encourage President Trump to visit the Pacific, including the US Compact states, in 2025 and attend the 2026 ASEAN East Asia Summit in the Philippines.

Strengthening Australia’s space cooperation with South Korea

The time is ripe for Australia and South Korea to strengthen cooperation in space, through embarking on joint projects and initiatives that offer practical outcomes for both countries. This is the finding of a new ASPI report by an ASPI visiting fellow from South Korea’s Defence Acquisition Projects Agency (DAPA), Sangsoon Lee, on the opportunities ahead for Australia and South Korea in terms of space cooperation.

Lee’s paper makes clear that there are opportunities to boost space cooperation and development to mutually benefit both states in areas such as national security, economic growth and resource management.

The paper argues that the first area of collaboration should be in joint research and development into small satellite technologies. These are satellites under 100kg, which, if developed collaboratively, could build domestic manufacturing skills and infrastructure in this important technology area. The paper notes that constellations of small satellites are more effective in strengthening resilience in the face of growing counterspace threats. Lee provides the example of South Korea requiring small satellites to enhance surveillance and reconnaissance of North Korea, and he notes that Australia also has a requirement for Earth observation satellites to support civil and defence needs.

A constellation of small satellites, jointly developed by Australia and South Korea, could thus benefit both countries. Although the current Australian government cancelled the National Space Mission for Earth Observation (NSMEO) project in June 2023, the requirement that it was to meet—for space-based Earth observation and intelligence, surveillance and reconnaissance— remains in place. By jointly developing such satellites, the paper argues, the Australia and South Korea could gain benefits not only from enhancing sovereign space capability but also through developing rapid technological innovation cycles.

Building on from collaboration on small satellites, the paper then suggests collaboration in the critical area of positioning, navigation and timing (PNT). This could be achieved by establishing suitable ground stations in Australia to support and enhance South Korea’s planned Korean Position System (KPS) and the Korean Augmentation Satellite System (KASS). Australia is optimally located for ground stations, as Japan has recognised in an agreement for this country to host the Japanese Quasi-Zenith Satellite System. Furthermore, by hosting these ground facilities, such collaboration would complement Australia’s existing Southern Positioning Augmentation Network (SouthPAN), which is also used by New Zealand. The overall outcome would be to enhance the accuracy, diversity and resilience of PNT services open to both states.

By far the most significant aspect of South Korean and Australian space cooperation could be space launch. Through streamlining procedures and regulatory arrangements such as launch permits export licenses and payment of export-import taxies, cross-border movement and launch of commercial rockets could become more efficient. To this end, the paper recommends that South Korea and Australia should negotiate an agreement to build and operate a permanent space launch site that takes full advantage of Australia’s proximity to the equator and distance from potential threats.

Rockets launched close to the equator for easterly orbits gain the starting advantage of the Earth’s rotational velocity, so the launch cost per kilogram is lower than for launches from higher latitudes. For those orbits and also for orbits that cross the poles, launches from Australia do not endanger people by flying over heavily populated territory. South Korea lacks proximity to the equator, and its rockets must dodge the territory of neighbours.

Lee’s paper notes that some cooperation is already underway in regard to launch. South Korean defence company Hanwha Group is exploring use of Australian launch services through a partnership with Gilmour Space, which intends to launch its Eris 1 rocket from Bowen, Queensland. Korean firm Innospace has signed an agreement with Equatorial Launch Australia for launch services from that company’s proposed Cape York space port.

In addition to streamlining regulatory arrangements for easier collaboration, Lee’s paper argues that a dedicated South Korean launch site, established by Seoul, could then benefit local economies.

Finally, the paper argues that there should be increased collaboration in space situational awareness and space traffic management as part of broader cooperation in space security. This makes inherent sense given the reality that space, as an operational domain in its own right, is highly contested and likely to become a warfighting domain in a crisis. Boosting cooperation on space situational awareness is a key step towards collaborating on deterrence through resilience, which other aspects of cooperation, such as small satellite development and responsive launch also contribute to.

Lee’s paper concludes with a recommendation for a space dialogue that brings together government, the private sector and civil society. This can help build collaboration and see a regular sharing of perspectives on both practical collaboration and policy development. Outcomes could include a government-to-government agreement on space launch cooperation and there could be a technology working group to support cooperation in areas such as small satellite development and PNT.

That would provide a foundation for more ambitious cooperation, with Lee’s paper considering ‘moonshot’ projects such as a lunar rover to be jointly developed and made by South Korea and Australia. Others could be a collaborative mission to a resource-rich asteroid and or research on technologies such as space manufacturing, resource utilisation and space logistics.

Australia and South Korea are both new space powers, so it makes sense for them to work together to make faster progress in using the space domain to their mutual benefit. Sangsoon Lee’s analysis is excellent and thought provoking. It represents a good contribution to any future discussion between South Korea and Australia on strengthening space cooperation.