AUKUS deal under scrutiny as US reconsiders its commitment

The Pentagon has initiated a review of the AUKUS submarine agreement, which was signed with the United Kingdom and Australia in 2021.

According to six sources familiar with the matter who spoke to the Financial Times, the review process, which will determine whether the US should cancel the project, is being led by Elbridge Colby, a senior defense official who has previously expressed skepticism about AUKUS.

The review has sparked concern in London and Canberra.

Some critics and experts have argued that the AUKUS deal could undermine US national security, as the navy is already struggling to produce enough American submarines to counter China’s growing naval power.

Australia and the UK plan to jointly produce a new class of attack submarines, named SSN-Aukus, which are scheduled to enter service in the early 2040s. However, the US has committed to selling Australia up to five Virginia-class submarines starting in 2032 to bridge the gap as its current fleet is retired. This commitment would almost certainly be voided if the US were to withdraw from AUKUS.

Last year, Colby wrote on X that he was skeptical of AUKUS, stating it would be “insane” for the US to reduce its number of nuclear-powered attack submarines, known as SSNs, in the event of a conflict over Taiwan.

In March, Colby said it would be “great” for Australia to have SSNs but warned of a “very real threat of conflict in the coming years” and that US SSNs would be “absolutely essential” for defending Taiwan.

Skeptics of the nuclear technology-sharing agreement have also questioned whether the US should help Australia acquire submarines without a firm commitment to use them in a potential war with China.

Kurt Campbell, the Biden administration’s deputy secretary of state and an American architect of AUKUS, emphasized last year the importance of Australia having SSNs that could work closely with the US in a conflict over Taiwan. Canberra, however, has not linked its need for these vessels to a potential conflict over Taiwan.

This review comes at a time of growing anxiety among US allies about the potential policies of a new Trump administration. Colby has told the UK and other European allies to focus more on the Euro-Atlantic region and reduce their activities in the Indo-Pacific.

A source close to the AUKUS discussions said Canberra and London were “incredibly worried” about the review of the agreement.

“AUKUS is the most significant military and strategic initiative between the US, Australia, and the UK in generations,” Campbell told the Financial Times.

“Efforts to enhance coordination, defense spending, and common objectives should be welcomed. Any bureaucratic attempt to undermine AUKUS would create a crisis of confidence among our closest security and political partners,” he added.

Pressure to increase defense spending

The Pentagon has been pressuring Australia to increase its defense spending. US Secretary of Defense Pete Hegseth called on Canberra this month to raise its spending from 2% to 3.5% of its GDP. In response, Australian Prime Minister Anthony Albanese stated, “We will determine our own defense policy.”

Charles Edel, an Australia expert at the CSIS think tank in Washington, noted, “Australia’s defense spending is increasing gradually, but not as quickly as that of other democratic states, and it is not at a level sufficient to cover the costs of either AUKUS or its current conventional forces.”

John Lee, an Australian defense expert at the Hudson Institute, said the pressure on Canberra is mounting as the US focuses on deterring China from attacking Taiwan within this decade. Lee added that if Australia does not increase its defense spending to 3% of its GDP, its navy will rapidly weaken.

“This would be unacceptable for a Trump administration,” Lee stated. “If Australia continues on this path, it is likely that a Trump administration would freeze or cancel Pillar 1 of AUKUS [the part related to submarines] to compel Australia to increase its military spending within the next five years.”

America First

A source close to the review said it was unclear whether Colby was acting alone or as part of a broader effort by the Trump administration. “The general consensus is that the former is true, but the uncertainty has confused Congress, other government departments, and Australia,” the source said.

A Pentagon spokesperson stated that the department is reviewing AUKUS “to ensure this initiative from the previous administration is aligned with the president’s ‘America First’ agenda.” The spokesperson added that Hegseth has “made it clear he intends for the department of [defense] to focus primarily on the Indo-Pacific region.”

Several people familiar with the matter said the review would last 30 days, though the spokesperson declined to comment on the timeline. “Any changes to the administration’s approach to AUKUS will be announced through official channels when appropriate,” they said.

A British government official said the UK was aware of the review. “This is sensible for a new administration,” the official noted, adding that the Labour government is also reviewing AUKUS.

“We have reiterated the strategic importance of the UK-US relationship, announced additional defense spending, and confirmed our commitment to AUKUS,” the official added.

The Australian embassy in Washington declined to comment.

The AUKUS agreement and China’s reaction

The AUKUS agreement, aimed at helping Australia build a fleet of nuclear-powered submarines through technology transfer from the US and the UK, was signed on September 16, 2021.

Under the security pact, named from an acronym of the three countries’ names, at least eight nuclear-powered submarines will be built at shipyards in Adelaide, the capital of South Australia.

The agreement is widely seen as a pact to counterbalance China’s military power in the region.

China has reacted strongly to the deal, emphasizing that the alliance will undermine regional peace and stability, as well as international efforts toward nuclear non-proliferation.