Op-Ed: No Need to Panic Over AUKUS Review

 

[By Euan Graham]

The Trump administration has ordered a review of AUKUS to be led by Undersecretary of Defense Policy Elbridge Colby. The review has some attendant risks, but also a potential upside for the three-way partnership.

The decision to review AUKUS shouldn’t be surprising. It’s normal, after a change of government, for a new administration to review existing commitments in the light of new policy priorities: in this case, ‘America First’. Britain’s Labour government has completed its own review into AUKUS, under Sir Stephen Lovegrove. This review reaffirmed the British commitment to AUKUS and made tripartite recommendations, including the need for a whole-of-nation approach to the partnership. As Lovegrove knows well, this was how AUKUS was originally conceived at its launch in 2021. Since then, however, AUKUS has increasingly become a defence-owned and defence-resourced initiative across the three partners. This has hampered its development, despite significant progress under Pillar One, the nuclear submarine optimal pathway. We can further expect the US review to assess cooperation on the smorgasbord of advanced military technologies under AUKUS Pillar Two.

It is unlikely that the US review will fundamentally reassess Washington’s commitment to remaining in AUKUS. Since Donald Trump’s election, Secretary of State Marco Rubio and Secretary of Defense Pete Hegseth have backed the initiative as a model for US cooperation with close allies. While Colby expressed greater scepticism out of government, his comments on AUKUS have been more neutral in-office. Washington has given mixed signals on AUKUS, and the administration’s approach has at times appeared disjointed. There is also the political drag factor of AUKUS being a legacy agreement from Joe Biden’s presidency.

Currently, the United States’ main point of contention is the commitment to sell and transfer three to five Virginia-class submarines to Australia’s navy, starting from 2032, under AUKUS’s optimal pathway. This stems from concerns around the US defence industrial base’s capacity to deliver enough submarines to meet both the US Navy’s and Australia’s requirements, at a time when US attack submarine numbers are approaching a low point and its submarine industry is already struggling to fulfil the recapitalisation of the US undersea nuclear deterrent force. Moreover, the Virginia class will have to continue in US service for significantly longer than expected due to slow progress on delivering its successor, SSN-X.

The US also has concerns about AUKUS partners’ capacity and commitment levels. Britain’s recent defence review and commitment to boost nuclear submarine production have eased doubts in the Trump administration. For its part, Australia has also made significant progress towards upskilling its submariners and defence workforce for the nuclear-propulsion challenges ahead. In February, Australia made its first direct financial contribution of US$500 million towards increasing US submarine production capacity.

However, Washington has growing concerns about the general trajectory of Australia’s defence spending. Earlier this month, Hegseth made clear the US’ expectation that Canberra lift its defence budget to 3.5 percent of GDP. While Minister for Defence Richard Marles initially indicated that the government was willing to have a ‘conversation’ around increasing Australia’s defence spending, Prime Minister Anthony Albanese appeared more reluctant to enter into new commitments, based on recent remarks.

On the Virginia transfer, in essence, the Trump administration needs to convince itself that the effect of transferring several submarines from the US Navy’s order of battle is outweighed by the longer-term gains of access to forward basing and new maintenance facilities in Western Australia. This access would be a strategic gain for the US, as it would strengthen US submarine presence in the Indo-Pacific priority theatre and support greater interoperability with Australia and with Britain, which has committed to forward deploying one of its attack submarines to HMAS Stirling from 2027.

On the more political issue around AUKUS complying with Trump’s ‘America First’ agenda, Australia’s ongoing cash infusions into the US defence industrial base should be appealing to the president, though the review could potentially recommend a higher price tag than the US$3 billion (A$4.5 billion) that Canberra has committed to. The US is also likely to press for a more focused and energetic commitment to Pillar Two.

Rather than overreact to the US government’s decision to review AUKUS, Australia should see it as an opportunity to make the strategic and political case for the partnership in Washington. In the future, Australia could consider launching its own review into AUKUS, including the opportunity costs it may present for Australia’s defence capability in the nearer term.

Euan Graham is a senior analyst as ASPI. This article appears courtesy of The Strategist and may be found in its original form here.