Tag Archive for: Australia-US relations

Ensuring Australia’s defence through complex interdependence

Australia’s defence thinking is based on outdated grand strategies. Adopting a complex interdependence grand strategy could create robust connections with many countries, enhancing national resilience to strategic, economic, technological and societal shocks.

Specifically, Defence would need to consider how to build resilience into its relationships to support Australian defence capabilities and industry.

Australia’s defence debates today generally assume that any proposals will readily fit within Australia’s current two grand strategies.

The balance-of-power grand strategy involves collective defence with the United States and implicitly targets China. The engagement grand strategy targets Southeast Asia and the Pacific through diplomatic, informational, military and economic links.

However, the world has changed. The US’s support in times of trouble is now doubtful. And while engagement is pragmatic, it misses the fact that Australia’s fastest growing two-way trading relations are generally elsewhere.

In an uncertain world, resilience is increasingly important as it allows a country to recover from major shocks, be they strategic, economic, technological, environmental or societal. To be sufficiently resilient, Australia must connect with other countries; no nation can thrive alone.

In a complex interdependence grand strategy, the objective would be sustaining international links that support national resilience. Achieving this will require formal and informal links with others that are problematic for them to break, whether intentionally as China is prone to, or carelessly as the US is now doing.

Developing such links involves creating asymmetrical interdependences that can be purposefully exploited to ensure robustness. Links with Australia must be in the hard-nosed self-interest of the other states to continue. Fuzzy talk of shared values or reminders that ‘we’ve always helped you’ fall apart in difficult times when international relationships are most threatened.

No single nation can provide the breadth or robustness of links that Australia’s resilience requires. This strategy would aim to weave a durable connective web of diverse relationships balanced to meet a range of possible shocks.

In devising this web, a starting point might be considering Australia’s significant two-way trading partners: China, Japan, the US, South Korea, India, Singapore, New Zealand, Malaysia, Taiwan, Thailand, Britain, Germany, Indonesia and Vietnam.

It is immediately apparent that this framework would consider security and prosperity in combination, rather than keeping them separate.

This has important implications for Australia’s defence.

Firstly, the focus of Defence would shift to building durable two-way links across multiple nations, rather than maintaining its heavy one-way reliance on the US. For example, this would mean favouring Japanese-designed frigates under Sea 3000. This would involve engaging Australian industry to build elements for use in both nations’ ships, such as Naval Strike Missiles, uncrewed submarines, towed sonar arrays and Nulka active decoys. Similarly, Australia might avoid buying more F-35 fighters in favour of joining the Global Combat Air Programme, a sixth-generation fighter project involving Britain, Italy and Japan.

Secondly, defending Australia’s international links would become a shared problem. This was not so in World War I and early in World War II, when others were unconcerned. For example, Australia should discuss with South Korea and Japan how to protect the large-scale seaborne trade in energy resources between them and Australia. Pragmatic, cooperative efforts to address this problem may help deepen other beneficial links.

Thirdly, Australia’s defence industry could deepen engagement with key countries. The industry is on the cusp of being a regional uncrewed system manufacturer, including high-end Ghost Bats and Ghost Sharks, and more affordable Speartooths and Bluebottles. Australian-made uncrewed systems have also been combat-proven in Ukraine. An ongoing effort to export uncrewed systems, or build them offshore bilaterally, could yield valuable links. Such export sales would also help maintain the viability of Australian defence industry as AUKUS dominates defence spending.

Such a grand strategy means that one or two nations would no longer dominate defence debates or decisions. Australia’s relationships should be shaped not by commercial pragmatism or defence alliance considerations, but by their robustness in times of strategic, economic, technological or societal shocks.

How to help the US Navy as it helps us: build a joint submarine facility

There’s a way for Australia to strengthen its case for the US presidential certification it will need for acquiring Virginia-class submarines. It should do so by accelerating construction of a planned shipyard in Western Australia and using it to help get US submarines out of a long maintenance queue.

Australia’s acquisition of three submarines from the United States’ stretched fleet and building yards could be offset by the additional operational availability of three US boats. The Australian yard would also improve support for US submarine operations in the Indo-Pacific.

By law, the US president will have to certify to Congress that transferring Virginia-class submarines to Australia will not degrade the US Navy’s undersea warfare capability. That certification will have to be provided no later than 270 days prior to the first transfer, which is scheduled for 2032.

The president will have to certify that the US and Australia are sufficiently investing in the submarine production and maintenance base to meet the requirements of both nations. This will require the current building rate of 1.2 Virginias a year to rise to 2.3 boats a year by 2032, which Australia will help achieve.

Australia could go further. It could reinforce the argument for certification by bringing forward the building of the shipyard planned for Henderson, Western Australia. Better still, Australia could establish this shipyard, by treaty, as a joint Australian-US facility, in recognition of its vital role in the alliance, which could be at least as significant as the contribution of the Pine Gap satellite ground station.

Why would such a joint facility be of value to the US? While Australians see AUKUS as a vehicle by which to acquire nuclear-powered submarines, the US sees it as a means for unlocking access to a vital operating location for its own submarines. This will be achieved by the rotational deployment to HMAS Stirling of four US submarines from 2027 under the Submarine Rotation Force—West (SRF-W) program.

Being able to operate routinely in the Indian Ocean without having to transit the congested littoral waters of Southeast Asia and in the Western Pacific in times of tension and conflict is of immense strategic value to the US. Being able to operate from HMAS Stirling with assured access to a nearby submarine maintenance facility at Henderson would, for the US, be better still. The US has no naval shipyard of its own west of Hawaii where it can maintain its submarines.

The Joint Defence Facility Henderson would be a maintenance, not building, yard for the US Navy. It would perform much deeper work than the support that HMAS Stirling will provide for SRF-W deployments.

It would become the US Navy’s fifth naval shipyard, adding to those in Maine, Virginia, Washington State and Hawaii. From Australia’s perspective, we have to build the shipyard at Henderson for our own purposes, anyway. Offering to operate it as a joint facility would ensure continuous workflow (as the facility would be the site for eventually maintaining 12 or more Australian and US submarines). This would assist in the recruitment and retention of what will need to be a long-term skilled workforce.

Becoming a trusted partner in an integrated allied submarine maintenance system would be an invaluable alliance contribution by Australia. The US Navy has a severe submarine maintenance backlog, currently forecast to last for decades. This backlog reduces the number of US submarines that can be put to sea. At the end of 2023, of a US Navy combat force of 48 attack submarines, 16 were in maintenance—that is, 33 percent. The US Navy is seeking to reduce that ratio to 20 percent; based on current fleet size, that would make six more submarines available to go to sea. Having access to an additional shipyard in Australia would assist the US Navy in achieving this maintenance goal. The US would have to pay for only labour and material costs for maintaining its own boats, taking advantage of Australia’s capital investment in Henderson for free.

To support the president’s certification, Australia could specially commit to ensuring access to Henderson such that the US Navy could reduce its maintenance backlog by at least three submarines between 2032 and 2038—which is when Australia is due to receive three Virginia-class boats (two refurbished and one new). Then the US would not be reducing its submarine force in honouring its AUKUS commitment. Beyond 2038, Australia could commit to further assisting the US to increase submarine availability. Over the very long term, by 2054 when the US and Australia would be operating a combined force of 74 attack submarines (66 in the US Navy and eight in the Royal Australian Navy), the two nations would between them have five naval shipyards and 22 drydocks for submarine maintenance, including Henderson.

To achieve this goal, Defence would need to cut through regulatory and construction obstacles, ideally aiming to have two operating drydocks ready in the Henderson shipyard by 2032 (perhaps using nuclear-certified floating docks at first, as Britain is seeking to do). Australia should seek to lock in such a treaty, thereby assuring itself of access to Virginia-class boats from 2032, by negotiating a deal with the Trump administration over the next 12 to 18 months.

If Australia does this, and assists the US to boost Virginia production, drives the development and production of the SSN-AUKUS submarine with Britain, extends the life of the Collins–class fleet, builds a proposed East Coast submarine base and acquires uncrewed underwater combat vessels at scale (in the thousands of units), it will become an undersea naval superpower. However, this will require political and bureaucratic leadership and organisational drive that is rarely seen outside of wartime.

Shipbuilding to Citizenship: solving the US skills shortage with immigration

Skill-based immigration can help the United States fill its severe shortage of shipbuilding workers, for both naval and civilian construction. Bolstering the labour pool would help the US and its allies match the Chinese maritime pacing threat and specifically benefit the AUKUS submarine program.

As the US scrambles to meet AUKUS obligations to deliver Virginia-class submarines to Australia, the shortage has become a critical production bottleneck. The Naval Sea Systems Command has estimated that the US submarine industrial base needs to hire 100,000 skilled employees in the next decade to meet demand.

The submarine labour crisis stems from the smallness of the wider US shipbuilding industry. In 2023, the US produced 157,00 tonnes of shipping, which pales in comparison with China, which produced 32.8 million tonnes in the same year. Japan and Korea, the other two major shipbuilders, produced 9 million and 18 million tonnes, respectively. As for the other members of the AUKUS partnership, Britain produced 64,000 tonnes and Australia only 4,300 tonnes. The small size of the US base means that naval builders have a smaller workforce to draw on, and skilled workers often leave the industry when naval construction is low.

There has been no serious consideration of the suggestion of former secretary of the navy Carlos del Toro to open more immigration pathways for shipbuilders as a solution. Yet immigration-based labour generation has worked in the South Korean shipbuilding industry and offers unique advantages in the US context.

The US has long used naturalisation to attract people to critical sectors, including the military. More than 5,000 non-citizens enlist in the US military each year. Non-citizen soldiers tend to serve longer, and their children are more likely than other citizens to join the services. The EB-2 National Interest Waiver program provides a path to citizenship for advanced-degree professionals whose work is vital to the US national interest, including AI researchers, biomedical engineers, and materials scientists.

The US similarly needs more welders, additive manufacturing experts and numerical-control machinists in shipbuilding. It must also generate a sustainable long-term labour force. This can be accomplished with a Shipbuilder to Citizen program, in which workers with experience and skill sets critical to the submarine industrial base worked in the industry for a set period in exchange for permanent residency and a pathway towards citizenship. Indeed, such a program would be a generational investment: skilled trades are among the professions most likely to be passed down from parents to their children.

An immigration-based approach would attract many workers. The US immigration system is already overcrowded with applicants. Moreover, skilled tradespeople are somewhat overlooked by current US immigration policy, which focuses on either degree-holding professionals or seasonal unskilled labourers. Shipbuilder to Citizen would not only buttress the submarine industrial base; it would also address an inefficiency in the current immigration system.

Security implications must be addressed. The Naval Sea Systems Command allows only US citizens to build or repair US Navy vessels. But a policy that embraces immigration could in fact help to address security concerns.

Non-citizens and even illegal immigrants are already known to have worked and even died building and repairing US naval vessels, despite the navy’s rules. If immigrant workers had a legal pathway into the industry, contractors and subcontractors could disclose their presence, and the navy could more easily identify exactly what jobs they were doing. They could be restricted to less technologically sensitive process, such as hull welding. Moreover, civilian shipbuilding could be heavily staffed with immigrants, releasing skilled US citizens for sensitive naval work.

There can be no valid concern of immigrants taking American jobs, since a shortage of workers is what makes this conversation necessary in the first place. Even the much-heralded Accelerated Training in Defense Manufacturing program has produced only 700 graduates in three years. Not even a large influx of immigrants would be enough to close opportunities to the domestic workforce. Indeed, an immigration policy approach serves as a complement, rather than a competitor, to domestic labour generation strategies.

The US needs to move quickly to fulfil its commitment to Pillar One of AUKUS. Timely delivery of Virginia-class submarines is key to maintaining Indo-Pacific deterrence and strengthening mutually beneficial ties between the US and Australia. A Shipbuilder to Citizen pathway can help the US get back on track.

AUKUS and deterrence: what, exactly, are we trying to deter?

AUKUS is one of the most ambitious allied defence undertakings in decades. But for all the high-end platforms and advanced capabilities it promises, a fundamental question remains underexplored: what, exactly, is AUKUS seeking to deter?

This question matters—not just as a theoretical exercise, but as a strategic imperative that will shape the effectiveness, and ultimate success, of the AUKUS enterprise.

The behaviour set that we want to deter is not self-evident. AUKUS has often been described as a way to ‘complicate Beijing’s decision-making calculus’ and ensure that President Xi Jinping wakes up every morning and says, ‘not today.’ Australia’s 2024 National Defence Strategy (NDS) establishes a strategy of denial as the cornerstone of defence planning, but this broad ambition lacks the precision needed to guide investment, prioritise technologies and convey clear thresholds of unacceptable behaviour to adversaries. If we are serious about generating credible deterrent effects, we must first clarify which behaviours we want to stop.

This is where definition of a behaviour set becomes critical. AUKUS partners must decide which specific behaviours they want to deter—whether they’re cyberattacks on critical infrastructure, attempts to blockade Taiwan, deployment of maritime militias in disputed waters or transfer of sensitive military technology to proxy actors. This clarity is not only foundational to aligning threat perceptions and deterrence priorities among the three nations; it is essential to guide the development of capabilities under AUKUS Pillar One (nuclear submarines) and, more urgently, under Pillar Two (other technologies).

This is not an argument against the enterprise; it is an argument for sharpening its purpose.

When AUKUS was announced in 2021, public attention fixated on Australia’s future fleet of conventionally armed, nuclear-powered submarines. That debate, often reduced to cost comparisons with diesel-electric submarines, missed the broader strategic purpose. Nuclear attack submarines provide greater range, stealth, speed and endurance, allowing them to operate far from Australia’s shores and to remain undetected in contested environments. They are instruments of deterrence that complicate an adversary’s risk calculus.

But the deterrent value of AUKUS does not reside solely in the eventual arrival of nuclear submarines. AUKUS generates deterrent effects along the way. Forward rotational deployment of US and British nuclear-powered submarines to Western Australia increases allied presence in the Indo-Pacific, strengthens joint operations and disperses assets in ways that make them harder to track and target. These actions signal resolve and contribute to deterrence immediately.

AUKUS is also laying the groundwork for fundamental realignment of the partners’ defence industrial bases. Reforms are being implemented to remove barriers to innovation, streamline information-sharing, and create the conditions for joint research, development and production. These efforts are about creating an enabling environment where advanced capabilities can be fielded quickly and used to impose costs on potential aggressors.

This enabling environment is particularly relevant to Pillar Two of AUKUS, which encompasses advanced military technologies, including quantum systems, AI, autonomous vehicles, cyber tools, hypersonics and electronic warfare. These technologies offer asymmetric advantages and can be deployed rapidly. But their effectiveness as tools of deterrence depends on one thing: knowing what behaviours they are meant to deter.

The central risk is that without a clearly defined deterrence objective, Pillar Two efforts could become diffuse, driven more by what is technologically feasible than by what is strategically necessary. Technological capability alone is not enough. It must be linked to purpose. Strategic clarity will help identify demand signals, focus innovation and guide experimentation—because deterrence is about sending signals, and ambiguity works only if adversaries have something clear to fear miscalculating against.

AUKUS was never meant to be business as usual. It is intended to be a blueprint for allied defence industrial cooperation. For this to succeed, the private sector must be brought in as a full partner. That requires clarity from government, including on what specific adversary behaviours the partnership is trying to deter. Industry needs to know where it should focus resources.

At its core, AUKUS is about delivering strategic effects. It seeks to align political, bureaucratic, economic, technological and military ecosystems across three nations to respond to a shared systemic pacing threat posed by China. But delivering effects requires more than intent. It demands cohesion. It requires a shared understanding of how individual investments and actions combine to influence adversary decision-making.

AUKUS has rightly been framed as a long-term bet on peace through strength. But strength without strategic focus risks becoming blunt. And in a world where rivals are moving fast and shaping the strategic environment, AUKUS must do the same—with purpose, focus, and a firm grasp of what exactly it is trying to stop.

Defence and Trump shape Australia’s election

Australia’s cost-of-living election has a khaki tinge and an uneasy international tone.

You know defence is having an impact when a political party promises to raise taxes to buy more military kit, and makes defence its largest election promise.

The domestic dimensions of the campaign have been decisively disturbed by forces beyond the borders.

The broad defence consensus between Labor and the Coalition has always had tacit and explicit dimensions. But much that was once implicit and inferred is now declared. Taboos fade. Sacred cows topple.

The international mantra of the 2022 election was ‘China has changed’. This time it’s ‘the United States has changed’. China and the US are destabilising forces in different ways, but are equally disturbing.

Each pushes Australia to think about defence more and spend more. Thus, the Coalition has promised to spend an extra $21 billion over five years, taking defence’s share of GDP from just over 2 percent to 2.5 percent within five years.

Labor’s plan is to lift defence spending to 2.3 percent by 2033–4, making the point that this is more than 0.2 percent higher than the spending trajectory it inherited. So, in opposition, the Coalition has become more ambitious for military might than it was in office. How times change. The 2.5 percent trek is the new policy norm. With the target agreed, only the timeline is in question.

The Coalition has reversed the standard election question ‘where’s the money coming from?’ Instead, it has announced the cash and said it’ll decide the details in office. The money answer is that Coalition will raise taxes by repealing Labor’s $17 billion tax cuts.

Labor has the military shopping list, the Coalition has the budget. Although coming from those two different directions, the campaign shows a consensus for more defence money, even as politics-as-usual argy-bargy continues over which side has the better record and the smartest plan.

The shadow defence minister, Andrew Hastie, said he’s ‘agnostic’ about what to buy with all the extra cash: ‘We’ve got to work out where the most pressing problems lie and then resource them.’

Reflecting the view that political parties are supposed to detail what they’re offering, Defence Minister Richard Marles argued that the Coalition policy has ‘no strategic direction, no strategic purpose’, offering only ‘vague numbers, aspirations, targets, but not one iota of substance’.

A generous view would be that the holes in the Coalition policy don’t show a lack of preparation, but an understanding of the rolling revolution in military affairs. Perhaps Hastie’s hesitation shows he wants to ask big questions about our future defence force. If so, it’s a brave move, because elections demand colour and movement, not a plea for time to think.

To caricature these complex debates about future defence kit, reduce them to a simple either/or equation: missiles and drones versus ships and submarines. Now there’s a proposition to light up The Strategist forever: sure, we want all of them, but even big budgets must make choices about rolling demands.

The other revolution in this campaign is Hurricane Donald. The decade-old Liberal-Labor consensus on the China problem now has a new twin, the understanding that Donald Trump makes the US a less reliable friend, testing the three core elements of Australia’s international policy: the US alliance, the region and multilateralism.

Explaining the Coalition’s defence spending plan, Andrew Hastie referenced the America First shift, stating: ‘We have a strong relationship with them but can’t take anything for granted.’

Journalist and academic Mark Kenny called the Coalition’s $21 billion defence boost the most consequential policy pivot in the election, based on a ‘terrified’ diagnosis that Trump’s US has ‘shifted from a global force of stability to a net creator of instability’.

The twin fear of China and the US is on show in Labor’s announcement of a critical minerals strategic reserve. Australia will stockpile rare earths to protect against ransom demands from China, as the dominant supplier of the minerals. The reserve will be offered to ‘key international partners’, so it becomes an important card in dealing with the transactional Trump.

The US has featured as a strategic factor in other Australian election campaigns: Harold Holt’s ‘all the way with LBJ’ campaign in 1966; Gough Whitlam in 1972 affirming the value of the alliance while proclaiming an Asia-focussed foreign policy; John Howard standing with the US after the 9/11 attacks; and Kevin Rudd in 2007 holding firm to the alliance while promising to depart the ‘bad’ war in Iraq while committing to the ‘good’ war in Afghanistan.

In those previous elections, alliance management stressed the enduring value of the alliance. In this campaign, Australia contemplates the US president as an unreliable bully, and the defence consensus adjusts accordingly.

Rudd and Shearer aren’t enough. Washington needs to see more Australian heavy hitters

We need more than two Australians who are well-known in Washington.

We do have two who are remarkably well-known, but they alone aren’t enough in a political scene that’s increasingly influenced by personal connections and therefore reputations.

The two are ambassador Kevin Rudd and the director-general of the Office of National Intelligence, Andrew Shearer. In dozens of meetings with officials, politicians, industry and think tanks in Washington on a recent trip, I repeatedly heard people mention Rudd and Shearer—but rarely other Australians.

What happens when one or both of those people are no longer in office? This country should systematically promote other people with strong reputations and work on developing more heavy hitters for the future.

Australia’s overriding national security issue is the risk that China dominates our region, establishes its authoritarian political system as the norm and uses coercion to extract what it wants from other countries at the expense of their liberty and prosperity.

While Australia must do what it can to look after its own security, we are much better placed with a strong US commitment to our region and to the alliance. It is therefore essential that our voice is heard in Washington.

Traditionally, a person’s access to US officials was determined mainly by his or her position, though reputation and contacts have always been important. But, even before the re-election of Donald Trump, reputation and contacts were pulling ahead of office as influential factors.

I saw in Washington in March and April that they were now dominant. My discussions took place in the usual departments and sensitive compartmented information facilities (known as SCIFs) but also in cafes, restaurants and bars. If you are a government official and work only 9 to 5 on Monday to Friday, on Monday morning you will be behind and scrambling to catch up.

Business these days is done everywhere all the time, and when it’s done away from the office, it’s more likely to be arranged at a personal level.

We are lucky to have Rudd and Shearer, who are well known by Republicans, Democrats and senior bureaucrats. They have both done excellent jobs in building their international networks over many decades, especially in Washington, the hub for international, security and defence debates. It shouldn’t be missed that both have spent time in think tanks and have diverse work experience across government and non-government.

Rudd is seen as a globally recognised, Mandarin-speaking expert on China. He also has great prestige as a past prime minister, which is a stronger factor in the United States, with its presidential system of government and respect for former leaders, than is generally appreciated in Australia.

Shearer is further elevated by being seen in Washington as the Australian official who is most nearly a national security adviser, a position that grabs attention in Washington.

It’s not his job that gives him this status, but his reputation for understanding global security issues. It isn’t hard to understand that we need to offer more than two people whom influential Americans are keen to meet, especially with Shearer based in Canberra.

Behind Rudd and Shearer, the bench is not deep. There are former and current intelligence chiefs, for example, who are listened to globally and have built strong relationships in the US intelligence community, including Australian Security Intelligence Organisation boss Mike Burgess.

Why do we have so few others of the status of Rudd and Shearer? The best explanation is the increasingly domestic focus of Canberra. Serving ministers and responding to a 24-hour media cycle is busy, urgent work. Talking points, possible parliamentary questions, Senate estimates, meeting records and minutes, reams of briefs absorb enormous resources.

I don’t exaggerate too much in saying that we’re incentivising the development of bureaucratic clones.

Yet we do have people in the public service with potential to become heavy hitters internationally. For the medium term, say, the 2030s and beyond, we should identify and begin cultivating them now, putting them in positions in which they can build reputations.

Foreign and security policy requires big picture strategic thinking, an understanding of defence, diplomacy, economics, politics and culture. People with this stature globally have worked through the major crises and twists of recent history.

They’ve built the confidence to be risk managers, not risk-averse. They’ve been mentored by the previous generation of giants. They’ve stood at the shoulders of influential leaders, ready to provide whispered sober advice at moments when an ability to see the forest rather than just the trees was most crucial.

They painstakingly earn their reputations, which then precede them through the doors into the most powerful rooms on earth.

We must identify those Australians who are already on their way to developing strong reputations—perhaps people in government but particularly in academia, business and think tanks.

ASPI is only one of several suitable hosts for the task, but we are also the only one with an office in Washington. Unfortunately, support for our DC office was cut in a government review of national security think tanks.

It’s poor timing to have fewer Australian voices and less convening power in Washington, which is why we aim to keep the office open.

One move that is guaranteed to deliver short-term results is for the next government to create a position of national security adviser. American officials notice that we don’t have one. So do friends in Europe and Asia.

All of our Quad partners, for example, have the role and they meet regularly, with no Australian at the table. In general, a job title may have lost its lustre in gaining traction in Washington, but the job title of national security adviser hasn’t.

Moreover, its lustre will stay with its office holder after he or she has moved on to other things.

So it’s a national priority: create people who, in an increasingly personalised Washington, are attractions not because of their jobs, but because of the wisdom for which they’re recognised. That’s what, and who, we need more of.

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.

A letter to America from an appreciative ally

Donald Trump’s philosophy about the United States’ place in the world is historically selfish and will impoverish his country’s spirit.

While he claimed last week to be ‘liberating’ Americans from the exploiters and freeloaders who’ve been screwing them, his assault on global trade was really just another step towards the US’s relieving itself of the responsibility it admirably took on as a new kind of superpower—one that embraced global leadership and used its power and wealth to shape the world for the better.

Americans should ask themselves, ‘Do you want to be remembered as the nation that changed the human story by overseeing a global system of rules and ethics that restrained people with power from doing whatever they liked to people without it? Or do you want history to describe the US as the country that, after a few generations of working to make the world a better place for all, chose the less exceptional path?’

All countries self-mythologise, sometimes in ways that elevate them. The uplifting story that the US has told about itself is that it is a special nation—a type of nation to which others can aspire, an indispensable nation. The US is great not in the sense of simply powerful. Many countries and empires have been powerful throughout history. Rather it is great in the sense that, as the world was becoming more connected in every way from sea trade to social media, it has recognised that global leadership based on a set of universal values was its responsibility.

Globalism is not, as Trump would have it, an ideology. It is a fact. Advances in technology, many driven by US innovation, as well as political, social and cultural progress, have brought the world together in the realms of both bits and atoms. US hegemony during this transformative period has helped deliver 80 years of remarkable stability, enabling the greatest ever period of global prosperity. The share of the global population living in extreme poverty, for instance, fell from 42 percent in 1981 to 9 percent in 2017, according to World Bank figures.

Most of the commentary about Trump’s revolution—the evisceration of foreign-aid agency USAID, the moral equivalence shown to Russia and Ukraine, the vengeful tariffs, the contempt towards likeminded democracies in Europe—has focussed on the self-defeating absence of strategic pragmatism. Commentators have shown a reticence in questioning the idea that the US has every right to act like an ordinary country and recalibrate its foreign policy to prioritise its national interest unyieldingly over the global interest.

Perhaps it’s presumptuous to say the US has an enduring duty. Granted, we can’t demand it continue to pursue global interests alongside its national interest. But as the biggest, richest, most powerful democracy at a time of rapid and confusing change, it has a unique opportunity—perhaps one that won’t come again any time soon—to keep leading the world through a period of progress, openness and stability, however bumpy that road might be.

Trump argues that global mindedness has come at an unacceptable cost to the US. But data shows otherwise. US GDP per capita, according to the latest World Bank data, is about US$83,000. Australia’s is about $65,000, with Britain $50,000, France $45,000, Germany $55,000 and Japan $34,000. China’s is about $13,000. The US has performed by far the best of any advanced economy in recent years. If the US’s friends are screwing it, they’re doing a lousy job.

The US-led global system has benefitted Americans as it benefitted others, some of those others perhaps more than Americans in relative terms, enabling those countries partially to catch up. That seems to clash with Trump’s win-or-lose guiding philosophy; if someone else has done well, that must be at our expense.

True, China has taken advantage of the liberal rules-based trading system and of globalisation. And yes, many friends of the US have neglected their defence spending obligations. But that message has now been heard loud and clear. However laggardly some allies have behaved, that doesn’t mean that the US is taken for granted. Indeed, it is deeply admired. Americans should not let Trump convince them that allies and partners are unappreciative spongers.

Perhaps the US wealth advantage would be wider still if it had pursued America First for many decades. But to what end? To become a bastion of material privilege in perpetuity? A nation of Mar-a-Lago inhabitants?

Think about those quintessential American stories, the type that Hollywood, more than any cultural centre, has mastered. When the bad guys ride into town or when the world starts to fall apart, the hero is the one who fights back, rallies everyone else, takes charge and puts things right. It’s not the person who shrinks away, tries to save his own skin or, worse, to profit from the chaos.

So this is a plea from an appreciative ally. The US that has taken responsibility for the world’s problems has billions of real friends and admirers. History will be very kind to it. You don’t need to make America great again. You already are great. But now you’re in serious danger of being just ordinary.

Australia’s plan for acquiring nuclear-powered submarines is on track

Since the announcement in September 2021 that Australia intended to acquire nuclear-powered submarines in partnership with Britain and the United States, the plan has received significant media attention, scepticism and criticism.

There are four major risks to the AUKUS national enterprise: the political will of all partners; delivery schedule; the cost of acquiring and sustaining the capability (including its impact on Australia’s broader Defence budget); and workforce challenges, both for uniformed personnel and within the submarine-building industry.

While these risks remain significant, the progress so far demonstrates a commitment to proactive mitigation. On the political front, the partnership demands considerable backing from Britain, the US and Australia amid global upheaval.

Yet despite changes in government across all three nations since AUKUS was first announced, the initiative has retained bipartisan support, a point reinforced by the US Congress supporting it through the passing of the National Defence Authorisation Act in December 2023, including the sale of three Virginia-class submarines to Australia.

The political will was further reinforced by the agreement of all three partners on the optimal pathway for Australia’s acquisition of nuclear-powered submarines within 18 months of its announcement and the signing of the trilateral AUKUS treaty in August last year, which came into effect in January.

Although the treaty was finalised before US President Donald Trump’s election, the new US administration has since shown strong support, with Secretary of State Marco Rubio calling AUKUS ‘something that I think you’re going to find very strong support for in this administration’ and a ‘blueprint’ for co-operation.

The new US secretary of defense stated in February that ‘the president is very aware, supportive of AUKUS, recognises the importance of the defence industrial base’.

Regarding the cost risk, while it is undeniably substantial, it is not orders of magnitude higher than the ill-fated conventional Attack-class submarine project. Senate estimates from October 2021 put that project’s acquisition and sustainment costs at almost $235 billion through to 2080.

In last year’s budget, the Australian government included money in the Defence allocation to cover the expected costs of acquiring nuclear-powered submarines over the next decade. While the overall defence budget remains a significant concern, this measure has been an important step in mitigating the cost risks of AUKUS.

Australia has been steadily increasing nuclear-submariner training in the US and Britain, and since mid-2024, shipbuilders from South Australia and Western Australia have been training on nuclear-powered submarines in Hawaii.

Whether these measures will prove sufficient remains to be seen, but it is a promising start.

Schedule risks remain a key concern, particularly for the phase two sale of three Virginia-class submarines set to begin in 2032. The Collins-class vessels are already beyond their intended service life, meaning the entire plan hinges on the Virginias arriving on time—or at least only slightly delayed.

The 2023 National Defence Authorisation Act, which lies at the heart of Malcolm Turnbull’s concerns, mandates that in 2031—270 days before the sale of the first Virginia-class submarine—the US president certifies that certain conditions are met. Notably, the transfer of the submarines will not degrade US undersea capabilities.

As Turnbull correctly notes, the US submarine industrial base is already struggling to meet its planned production rate of two Virginia-class submarines per year and is unlikely to reach its goal of 66 attack submarines by 2054.

However, this does not mean that the US president in 2031 would seek to undermine Australia’s submarine program by refusing to sell three submarines. Undersea warfare effectiveness hinges on more than raw submarine numbers; it depends on having the right submarines in the right place at the right time.

This is where access to Australia’s western naval base, HMAS Stirling—and the maintenance facilities it will provide for US nuclear submarines—becomes crucial. It will help ensure US submarines can be deployed effectively when and where they are needed.

Australia’s broader contributions, including the continued support of the Harold E. Holt Communications Station north of Exmouth, further bolster US undersea warfare capabilities by facilitating secure communications with nuclear-powered submarines in the region.

It is imperative for Australia to make clear to the US just how vital submarines are to our national security, and to emphasise that the extensive support we provide, including access to Australia’s strategically important geography, is part of the deal. This is especially important given the more transactional nature of the current US administration and alliance framework.

In response to Turnbull’s call for an ‘urgent assessment’, the answer is that Australia’s plan to acquire nuclear-powered submarines remains on track.

Yes, it carries significant risks—as any major national endeavour does—but the challenges have been identified, and mitigation measures are in place. The progress made over the last three and a half years is substantial. Rather than repeatedly reassessing the program, we should concentrate our political and intellectual capital on ensuring it stays the course.

Trump’s tariffs: Australia’s worry is the effect on its trading partners

With the execution of global reciprocal tariffs, US President Donald Trump has issued his ‘declaration of economic independence for America’. The immediate direct effect on the Australian economy will likely be small, with more risk from the confluence of tariffs on its key trading partners. But the global effects of the United States’ tariff regime will extend beyond the economic effects, with implications for America’s reputation as a trusted and reliable partner. All the while, China stands ready to fill the gap.

With Trump’s latest executive order, from midnight on 3 April the US will impose far-reaching tariffs on other countries to compensate for the alleged combined impact of foreign countries’ tariffs and non-tariff barriers on US exports. Emphasising the ‘fairness’ of the approach in a White House Rose Garden address on 2 April, Trump said the reciprocal tariffs of up to 50 percent equated to just half of the trade measures levied by those countries against America. These were complemented by a baseline tariff of 10 percent on goods from every country—except for Canada and Mexico, which are already subject to tariffs of 25 percent. The 10 percent would not be added to goods already subject to tariffs, such as semiconductors, steel and aluminium.

The 10 percent levied against Australian goods exports to the US will likely have a minimal impact on Australia’s economy, despite being estimated to constitute a direct cost the Australian industry of US$1.6 billion. Speaking to the media after the tariff announcement, Prime Minister Anthony Albanese said the tariffs were unwarranted and ‘not the act of a friend’. But he also sought to reassure, noting the exports constituted less than 5 percent (US$16.6 billion) of Australian goods exports. By comparison, more than 30 percent of Australia’s exports are sold to China.

Australia provides duty free access to US imports under the 2005 Australia-US Free Trade Agreement. However, the Trump administration’s concern with Australia is likely with what it considers non-tariff barriers as outlined in the findings of the USTR report on Foreign Trade Barriers (PDF), of 1 April. The report details several longstanding US concerns with Australian biosecurity regulations on agricultural products (certain meat and fruit imports), issues with Australia’s policies on pharmaceuticals (which mandate a price for drugs under the Pharmaceutical Benefits Scheme) and payment for news content on social media. While it doesn’t mention Australia’s recent social media protections for children, this has also been raised by the US tech industry as a non-trade barrier.

The 10 percent tariff scenario will impose short-term direct costs on Australian industry. Most affected will likely be Australian beef and other meat products, exports of which to the US were worth US$4 billion in 2024 and accounted for more than a quarter of US imports of foreign beef. The US has been Australia’s largest market for beef in recent years. Despite having a large beef industry, the US relies on certain imported beef products. This could give a degree of leverage as Canberra progresses long running negotiations with Washington on the issue. Albanese has ruled out any compromise on other US concerns, in particular social media protections and the Pharmaceutical Benefits Scheme.

Australia’s trade-exposed economy will be more vulnerable to second and third order effects as some of Australia’s key trade partners respond to these new tariffs. While tit-for-tat tariffs may depress the Australian economy, greater impact will likely come from regional partners adapting trade strategies and adjusting supply-chains to minimise their exposure, and from businesses delaying investment decisions due to uncertainty around US and other governments’ policies.

Four of Australia’s top five trading partners, accounting for 44.3 percent of Australia’s two-way trade in 2023–24, are subject to higher US tariffs: China (a 34 percent tariff), Japan (24 percent), South Korea (26 percent) and India (27 percent). Developing or emerging economies, such as Vietnam (46 percent) and Indonesia (32 percent), will likely find it harder to absorb the effect of tariffs, due to their reliance on export-driven growth and deep integration in global manufacturing supply chains. The resumption on 2 April of exclusion of goods from China and Hong Kong from duty-free de minimis treatment will be an additional hit to the Chinese economy.

The Indo-Pacific is home to most of the world’s people. It accounts for 60 percent of global GDP and two-thirds of global economic growth. Since former president Barack Obama’s much vaunted Pivot to Asia from 2011, the US has sought to focus more strongly on the region for strategic and economic reasons. Despite some efforts such as the Indo-Pacific Economic Framework, US protectionism has hampered meaningful progress on US trade with the region. By comparison, China is likely the top trading partner for most countries in the world, particularly in Asia. As China actively competes with the US for influence with these countries, steep US tariffs on their exports may cause them to orientate away from the US market, deepening this trend. Tariffs will undermine US efforts to establish itself as a preferred partner in the Indo-Pacific region while providing China with ammunition to support its claims of American self-interest and unreliability.

This article has been corrected in several places. It now says the direct cost to Australian industry from Trump’s tariff on Australia is estimated at US$1.6 billion, that it will likely have minimal economic impact, that the administration’s Australian concern is likely with what it sees as non-tariff barriers, that Australian pharmaceutical price regulation applies not only to imported pharmaceuticals, and that the tariff on India is 27 percent.