What is the Indo-Pacific’s defense outlook midway through 2025?
- Admin
- Jul 2
- 3 min read
The world is in a particularly dangerous and tense moment. The Trump administration was set to iron out some of the finer points of AUKUS and its Pacific defense strategy at a G7 meeting in Canada this June.
But President Trump left the meeting early. Apart from Canadian Prime Minister Mark Carney, getting under Trump’s skin, Iran and Israel started attacking each other.
A few weeks later was the NATO summit at The Hague. Ukraine was the topic of conversation here, and suffice it to say that absolutely nothing came out of it. But the Pentagon is now reviewing US defense policy in the Indo-Pacific.
The "Big Beautiful Bill" promises huge money for defense spending. Still, many in the Pacific defense community are growing anxious about when the Trump administration might take the region seriously and whether it will treat them with the same level of respect as its European counterparts.
To reassure the reader, it is entirely normal for new administrations to review existing defense commitments upon taking office. The UK and Australia have both reviewed AUKUS since their new respective governments took over.
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America’s Pacific allies have also been far less pressured than those in Europe over defense spending, capabilities and commitments. But those in charge of the review, at the Pentagon and Trump himself, are causing private jitters.
There are, first, concerns that an erratic and transactional politician like Trump could severely gut AUKUS and start to scale back America’s defense presence in other parts of the Pacific, be it the QUAD or Compact States.
The Trump administration is already demanding sharp increases in annual defence spending from Australia, from nearly 2 percent to 3.5 percent of GDP, and could soon insist on new commitments to fight alongside America. If Australia cannot or refuses to make these commitments, Trump could terminate parts of the AUKUS deal. That has not happened yet, but it is not out of the realm of possibility.
The Pentagon man leading the review is one Elbridge Colby, its policy chief. Before Trump came back into office, Colby had criticized the AUKUS deal as America giving away its “crown jewels” in the Virginia nuclear-powered submarines.
The AUKUS agreement, signed in 2021, allows Australia to deploy nuclear-powered submarines by the mid-2030s. This will allow Australia to join an exclusive club of nations operating nuclear-powered vessels, which can range over longer distances than their diesel-powered counterparts. To help Australia get boats in the water more quickly, America has agreed to sell up to five Virginia-class attack submarines in the middle of the next decade. After that, Australia will build its own submarines to a new British design in the 2040s.
Australia is also investing $3 billion into America’s submarine industry as part of the deal. It has vast congressional support, especially since much of the building is taking place in red or Republican-friendly districts. Much of Colby’s earlier criticism lacked knowledge of basic reality. Colby thought giving away these submarines would make America more vulnerable to China.
The precise point of AUKUS was to deter China in both the short and long term. More so, the AUKUS submarines will be based out of Chinese range, unlike those in Guam.
An attack is very unlikely and that was a major attraction of the deal, as was intelligence and AI sharing. It would provide Silicon Valley with a massive boom, although maybe that is why Trump dislikes it.
Silicon Valley would of course be located in San Francisco, California. It is a state whose San Francisco-born governor, Gavin Newsom, Trump absolutely despises. And yes, he is that petty to tank a deal over personal spats. But the 2030s and 40s all seem so far away and American manufacturing of the proposed subs has fallen way behind schedule. It is currently building 1.2 a year, when the target was 2.3.
That has the review team concerned (rightly) that they can even pull off that deal. The allocated funds must be spent wisely. Colby has since softened his stance on AUKUS and recent comments suggest he now sees the value.
Secretary of State Marco Rubio remains a China hawk, despite setting fire to everything else he used to believe in since entering the job. But Canberra is still worried. It will be months before Australia, the UK, Pacific nations and the QUAD member nations will have Trump’s ear on these matters again.
A lot could happen in that time in other parts of the world. Ending the war in Ukraine will be tough and preventing more explosions in the Middle East will be even harder. The Pacific can only wait and hope Trump shows up in a good mood.
