US tariffs, political tensions threaten AUKUS nuclear submarine sale to Australia

The sale of nuclear-powered submarines to Australia under the AUKUS treaty faces increasing uncertainties as U.S. President Donald Trump's tariffs take effect, and amid concerns in Washington about the potential impact on deterrence against China. 

The key issue, according to Reuters, lies in whether the US can ramp up submarine production to meet Navy targets, which is critical for Australia to begin purchasing three Virginia-class submarines by 2032, as discussed by Australian Defence Minister Richard Marles during talks with U.S. counterpart Pete Hegseth, Caliber.Az reports.

Marles also revealed a previously unreported 2025 deadline for Australia to pay $2 billion to assist in enhancing U.S. submarine shipyards, with the Trump administration seeking additional funding. This financial pressure compounds concerns in Washington that transferring submarines to Australia without a clear commitment to use them against China would weaken U.S. deterrence efforts in the Indo-Pacific.

Further concerns emerged in a US Congressional Budget Office report and testimony regarding Navy shipbuilding delays, which cautioned that selling Virginia-class submarines to Australia without replacements could be risky if Canberra doesn’t clarify its stance on Taiwan.

The debate over the submarine sale also aligns with Australia's broader defense strategy. Peter Dean from the University of Sydney's U.S. Studies Centre explained that, in the event of a Taiwan contingency, Australia might not directly participate in the conflict, as U.S. forces would likely focus on Taiwan while Australia’s priority would be protecting its mainland. Dean added that nuclear workforce shortages and budget constraints in Australia would likely delay the submarine sale.

The Australian Submarine Agency sees acquiring nuclear-powered submarines as integral to Australia’s defense strategy, equipping the country for intelligence, surveillance, undersea warfare, and strike missions. A Pentagon spokesperson confirmed that the US remains committed to supporting Australia’s acquisition of conventionally armed, nuclear-powered submarines at the earliest possible date.

However, domestic politics in Australia could further complicate the AUKUS deal. While major political parties support the treaty, disappointment over the lack of exemptions from Trump's tariffs has sparked public scrutiny. A potential hung parliament in the May 3 national election could grant independent lawmakers, skeptical of Trump, greater influence over the deal.

The AUKUS agreement is set to span three decades, beginning with a rotating force of US-commanded Virginia submarines and one British submarine at HMAS Stirling, Western Australia, starting in 2027. From 2032, Australia will begin receiving Virginia-class submarines under Australian command, with an Australian-British AUKUS-designed submarine expected by 2040.

Peter Dean cautioned that relying on a US-commanded fleet until 2040 would equate to outsourcing Australia’s defense to another country, which he deemed unacceptable. Former Australian Prime Minister Scott Morrison, who brokered the AUKUS deal, argued that the agreement’s deterrent effect against China was crucial to regional security, particularly in the South China Sea and the Indian Ocean.

Since Labor Prime Minister Anthony Albanese took office in 2022, there has been a shift toward a less confrontational stance on China, though Australia’s military continues freedom of navigation patrols in the South China Sea. The AUKUS deal has become a point of contention in the election, with opposition leader Peter Dutton criticizing Albanese’s approach. Arthur Sinodonis, Australia’s former ambassador to Washington, underscored the deterrence effect of AUKUS, whether the submarines are under U.S. or Australian command, highlighting the ongoing tension with China over the deal.

By Tamilla Hasanova