Trump Tariffs Shake AUKUS Alliance

CANBERRA, THURSDAY – The imposition of a 10 percent import tariff by United States President Donald Trump on Australia not only impacts the economic and trade cooperation between the two countries. In terms of defense and security, the Australia-United Kingdom-United States alliance, or AUKUS, is now under threat. According to Reuters News Agency, Thursday (10/4/2025), doubts have emerged regarding the future of nuclear submarine sales for the Australian Navy.

Australia is actually experiencing a deficit in its trade balance with the United States. However, on April 2, 2025, Trump still imposed a 10 percent tariff on Australia, citing that both allies and adversaries have long taken advantage of the United States in terms of trade.

Trump's actions were negatively received by Canberra. Although the 10 percent tariff is considered low, for Australia, this is seen as an act of betrayal to the friendship between the two countries. The response from the Australian public has prompted the government to reconsider various collaborations with the U.S., including AUKUS.

“Cancel AUKUS,” tweeted Peter Brandt, Green Party Leader in X on April 3, 2025.

Not only Brandt, Foreign Policy magazine, April 3, 2025 edition, reported that many independent politicians in the Australian parliament have similar views. They consider the alliance formed in 2021 to no longer be in line with Australia's interests.

In fact, it is estimated that in the May 2025 general election, Australia's two dominant parties, the Labor Party and the Liberal Party, will not secure a majority of seats in parliament. Candidates from the Green Party and independents are expected to gain significant votes.

AUKUS was established in 2021 with the intention of countering China's influence in the Indo-Pacific. This alliance scheme consists of two pillars. The first pillar involves the deployment of eight nuclear-powered submarines to patrol Australia and its surrounding areas. The second pillar focuses on the sharing of knowledge and technology between Canberra, London, and Washington DC.

In the first pillar, there are two phases. The first involves bringing three new Virginia-class nuclear-powered submarines from the U.S. to Australia by 2032. Additionally, Australia and the United Kingdom must complete the construction of one SSN-AUKUS series nuclear-powered submarine by 2040.

The second phase involves completing the construction of the remaining submarine units. The total funding for this nuclear-powered submarine procurement project is 368 billion Australian dollars.

"We have two obstacles. Australia still needs to pay off the production cost of 2 billion Australian dollars for the construction of three Virginia-class units. Even if paid in full, there is no guarantee they can be completed and delivered on time," said Australian Defense Minister Richard Marles in Canberra, Thursday (10/4/2025).

This is because 35 percent of the raw materials for shipbuilding and submarines in the US are imported from other countries. All US trading partners are subject to import tariffs by Trump. As a result, the price of building a Virginia-class submarine is likely to increase.

Tariff increases will also hamper the supply chain. It takes a year to build a single Virginia submarine. Given the risk of delays in the arrival of raw materials, it will take longer to build and complete the construction of the submarine. The subsequent impact is that the deployment of the ship will pass the deadline.

The next obstacle is the second pillar of AUKUS on technology sharing. There is no information on the amount and type of technology that will be shared by each party. "The US only wants to share 70 percent of their technology, whereas we want all the relevant technology in this alliance," said Australian Ambassador to the US, Kevin Rudd.

Beyond those two obstacles, there is another aspect that the US is concerned about, namely Australia's reluctance to go to war if conflict breaks out. Currently, the US Navy is preparing itself so that by 2027 it will have sufficient capability to face China, in case there is an open conflict.

In the worst case scenario, the conflict risks breaking out in the Taiwan Strait. The US wants Australia as a member of AUKUS to send its nuclear-powered submarines to the waters. However, Australia has never supported the US's wishes.

Peter Dean, a defense analyst at the University of Sydney, said Australia's interest is to secure the waters around its territory if conflict breaks out. There are two US military bases in Australia whose security is Canberra's responsibility.

For Australia, it is too far to take their ships patrolling the South China Sea, especially since the US has chosen a military base in Japan which is closer to the estimated point of conflict. They would be better off securing the Pacific region which directly intersects with Australia's resilience.

“This is inconsistent with the US view that if Australia wants to deter China, it must also be ready to fight if necessary,” said Bryan Clark, director of the Hudson Institute’s Center for Defense Concepts and Technology.

Not only from the US, the British Parliament on April 2, 2025 announced that they were reviewing London and Canberra's defense cooperation regarding AUKUS. According to London, this is a reasonable evaluation, considering that the cooperation has been running for four years so it is time to be reviewed.

“Geopolitical dynamics are changing in the world. Therefore, the UK and Australia’s cooperation on AUKUS must be reviewed to ensure that everything is on the right track,” reads a statement on the UK Parliament website.

Ian McPhedran, an Australian defense analyst, wrote on the policy review site The Mandarin. While the UK has not said it has lost confidence in AUKUS, the alliance is already shaky. Australians' trust in the US and AUKUS is down.

Australia does not have the infrastructure or manpower to maintain nuclear-powered submarines. The public has also raised objections to the government's proposal to increase the defense budget from A$60 billion by 2025 to A$100 billion by 2030.

“At the same time, we are also in too tight a position to leave this alliance,” McPhedran said.

The uncomfortable position was also outlined by Lieutenant General (ret.) John Frewen on the Australian Strategic Studies Institute (ASPI) website. He said Australia must rethink its security and defense strategy.

It is indeed hasty to judge the US attitude toward Australia based on the conduct of one administration. However, Australia can no longer rely on the US for its own and regional security. Australia must seek new defense partners.

As fellow members of the Pacific Islands Forum, New Zealand and Papua New Guinea are Australia's natural partners. However, their defense capacity is far below. Britain, as a sister country, is too far from Australia geographically.

“Indonesia is a very important country for us, but the Jakarta-Canberra diplomatic relationship is too up and down,” Frewen said.

He explained that Singapore and Japan are the two countries with norms and interests that are most similar to Australia. In addition, they also have quite strong defense budgets and capabilities. (Reuters)