In ordinary times, a new administration’s review of a major defense partnership such as the Australia–U.K.–U.S. (AUKUS) trilateral security pact would be seen as more or less routine. But these are not ordinary times.
The review recently announced by the Pentagon has prompted bipartisan anxiety in the United States, as well as in Canberra and London. The review reportedly was prompted by concerns that the agreement, which includes the sale of U.S.-made submarines to Australia until the latter can develop its own production capacity, will leave the United States without enough boats of its own given the state of America’s submarine industrial base. These concerns, and related worries about the slow pace of the technology-cooperation agenda under the agreement’s second pillar, are not unfounded, and the review also may be an attempt to generate leverage on Australia to increase defense spending. But the anxiety is understandable that the review is an excuse to downsize, or even abandon, one of the most far-reaching security agreements that the United States has struck over the last two decades.
One of us (Jennifer) served as the lead negotiator for the AUKUS implementing legislation in the U.S. Senate, and the other (Stephen) held the defense industrial strategy portfolio on the National Security Council staff through January 2025. Having seen up-close the progress and challenges of carrying out the early phases of AUKUS, we recognize that there are sensible reasons for the Trump administration to pose hard questions in its review. But we also believe it would be a grave mistake for the United States to walk away from AUKUS. There are three reasons why AUKUS can and should, with appropriate revisions, be a compelling “America First” priority.
Strategic Logic Remains Sound
The first is that the strategic logic of Australia acquiring its own advanced submarine capabilities to deter China’s coercion in the region (known as “Pillar I” of the partnership) remains fundamentally sound. Providing the Australians with this capability would enable them to increase their contributions to deterrence against China and to the U.S. military if deterrence fails. The idea of a regional ally spending money to enhance its own military capabilities and contribute more to advancing shared national security interests is very much in keeping with an America First approach. Similarly, providing the United States with access to skilled maintenance and rotational basing in the Indo-Pacific theater will increase the resiliency of the U.S. submarine fleet, and enable the United States to overcome operational problems in the Indo-Pacific in the event of a contingency.
Achieving these two goals depends on revitalizing the submarine industrial base in the United States, as well as in Australia and the U.K. Over the last 40 years, five shipyards that served the U.S. industrial base for submarines closed, the workforce shrank, and numerous suppliers exited the market. The United States has surged investment to shore up the submarine industry, thanks in part to supplemental appropriations from Congress. The Aussies are pouring in resources as well, committing $4.7 billion in total. The Trump administration is rightly concerned that the Australian and U.K. commitments to invest in their own defense budgets may be insufficient and that the capacity of the U.S. industrial base may be unable to produce boats for the Joint Force and Australia on schedule given the current production rate.
No one wants to see the agreement exacerbate gaps in U.S. submarine capabilities at a time when China is dramatically expanding its own navy and actively probing the weaknesses of Taiwan and U.S. allies in the region. It is important to remember, however, that the increase of U.S. and Australian government funding to the submarine industrial base as a result of the partnership is still relatively recent, and therefore this review provides a timely opportunity to ensure that those dollars are spent wisely. This means asking tough questions, including:
- How to expand the existing supply base and ensure current suppliers do not exit the market;
- How to leverage existing policy instruments and assess where new ones might be needed to recruit and retain workers;
- How to accelerate the expansion of shipyard production capacity, strategic outsourcing, and the use of advanced manufacturing technologies; and
- Whether the future of submarine production is best served by maintaining the teaming arrangement between the two main sub builders – Huntington Ingalls Industries in Virginia and General Dynamics Electric Boat in Connecticut?
Leveraging the Private Sector
The second reason AUKUS fits the bill is that there is a real opportunity in this AUKUS review to do what “America First” Pentagon planners are already trying to do across the defense enterprise: encourage private-sector capital and prioritize companies and defense institutions that are nimble and innovative. AUKUS Pillar II was designed to deliver near-term advanced capabilities by facilitating high-end defense cooperation between the three partner countries. It has, however, been plagued by regulatory inertia and lack of public capital, and has been insufficiently linked to priority capabilities.
The Pentagon review may be focused mainly on Pillar I, but it should also be used to address these issues. The team in charge would be wise to clarify priority requirements shared among the three nations, even if that means a narrower scope of technologies or capabilities. This could not only speed up progress, but also increase opportunities for commercial industries and private capital. The moment is ripe to do this as the U.S. considers changes to the U.S. Defense Innovation Unit’s remit and budget, especially if they prioritize work in coordination with the newly announced defense innovation hub in the U.K., and the new Advanced Strategic Capabilities Accelerator (ASCA) in Australia. Along these lines, the review should also consider trilateral policies and structures to facilitate private-sector involvement and funding from all three countries.
High-End Burden Sharing
The third reason AUKUS meets the terms of “America First” is that it provides a key test case for a new kind of high-end burden-sharing that will be vital to America’s future competitiveness. The Trump team rarely misses an opportunity to prod U.S. partners and allies to pull their weight by spending more on defense and taking on more expansive security responsibilities. This is often sensible, and often overdue. But burden-sharing in an era of strategic competition, when America’s adversaries are increasingly aligned and pouring resources into their defense industrial bases, needs to include efforts to boost defense industrial cooperation with co-development, co-production, and co-sustainment. This also means leveraging one another’s R&D money and private capital flows toward common efforts.
We can both attest to the depth of bipartisan support for the idea that the United States must find new and creative ways to build collaborative defense ecosystems with our trusted partners — not as a “gift,” but as a shrewd strategy to forge a wider base of funding and innovation to compete with China’s enormous investments in advanced technologies. The reality is that U.S. military assistance to Ukraine and Taiwan has starkly highlighted for policymakers the real limits of the U.S. industrial base to meet demand across a range of capabilities. Partnerships like AUKUS point toward a new way of meeting those needs, as well as advanced technology requirements that we are only beginning to define.
AUKUS is going to continue be a complex partnership that requires periodic review and revision by senior leaders in all three countries. But this Pentagon review should not lose sight of the fact that AUKUS can and should serve as a valuable testbed for some of the ambitions that this administration has most loudly trumpeted: revitalizing America’s defense industrial base, leveraging private-sector capital in defense, creatively competing with China in a range of advanced technologies, and overcoming antiquated export restrictions.
The success of AUKUS is important not just for the sophisticated capabilities that it seeks to deliver to the three partner countries but, over the longer term, for validating and refining a kind of joint defense model that the United States can use to forge more productive partnerships with countries like Japan, Korea, India, and a range of NATO partners who seek to more deeply participate the U.S. defense industrial ecosystem and are willing to invest their own research and innovation resources to make it happen.
