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Key Points
- The AUKUS nuclear submarine deal could once again be under threat.
- Steel and aluminium tariffs could make building the submarines far more costly.
- Australia has pledged to increase its defence spending amid political uncertainty.
Australia has been warned United States tariffs could push up the cost of submarines due to be acquired under the AUKUS defence pact, as Donald Trump tasks Elon Musk’s team with improving America’s capacity to build the boats.
According to a report in Nine newspapers, Virginia senator Tim Kaine, the most senior Democrat on a Senate subcommittee on seapower, said more than a third of the steel and aluminium that went into ships and submarines came from partners, including the United Kingdom and Canada.
Both countries have been hit by tariffs imposed by Trump, prompting concern the cost of nuclear-powered submarines promised to Australia under AUKUS could be made more expensive.
Dr Euan Graham, senior analyst at Australian Strategic Policy Institute, said while the US-Australia military alliance was getting closer, there was more doubt and political uncertainty.
“What it requires is a hard swallow in Canberra and a willingness to double down,” he said.
“I don’t just mean on AUKUS, but what the Australian Defence Force needs urgently is to get as much combat capability into service as soon as possible, given the security headwinds that we face globally and in the region,” Graham said.
Graham said the “common complaint” of Australia relying on the US for its security, was down to inadequate defence spending.
“Australia has had a relatively easy, cheap ride on defence, and that ride may be coming to a natural end now,” he said.
“Not because it’s been broken by American political dysfunction, but because we’re in a pre-war situation in this region.”
Australia’s defence spending is currently at about 2 per cent, but with increased expenditure, it is set to rise to just above 2.3 per cent by the end of the decade.
Under AUKUS, Australia is set to acquire three Virginia-class submarines from the US in the early 2030s, before a new fleet of boats is built for delivery from the 2040s.
But the US is lagging in the production of the boats, and under the current terms, a sitting US president can sink the deal if they decide their own navy’s capabilities are at risk.
According to a separate report from the Reuters news agency, some experts have cautioned that the sale of the nuclear-powered submarines under AUKUS could be in doubt, amid concerns in the US that providing the submarines to Australia may reduce US’ deterrence against China in the Indo-Pacific.
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