Australia, explained.
Prime Minister Anthony Albanese (Matt Jelonek/Getty Images)
Dealing with Trump 2.0 demands concrete defence spending increases, not diplomatic charm, as Pentagon reviews submarine deal.
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Albanese must learn that smiles and handshakes with Trump won’t save Australia’s AUKUS ambitionsAlbanese must learn that smiles and handshakes with Trump won’t save Australia’s AUKUS ambitions
Anthony Albanese missed out on the long-awaited face-to-face meeting with Donald Trump at the G7 meeting in Alberta and is now considering attending the NATO meeting at The Hague next week to try again. Following the announcement of a Pentagon review into the extent to which AUKUS is aligned with Trump’s America First agenda and the doubling of tariffs for steel and aluminium exports into the United States from 25 per cent to 50 per cent, Albanese is under political pressure to establish a personal relationship with the President to defend Australia’s defence and trade interests.
In 2017, Trump did not expect to win and was not ready to govern when he beat Hillary Clinton in the election. As a newly elected leader with no experience in government, personal relationships and conversations disproportionately shaped his responses. Leaders such as Japan’s Shinzo Abe and Australia’s Malcolm Turnbull established strong personal connections with Trump, gained the President’s respect, and enjoyed a relatively productive relationship with the administration as a result.
Albanese is trying to do the same.
This time, a strong personal relationship with Trump will only go so far because the second term Trump administration will not be like Trump 1.0. Since reluctantly leaving the White House in January 2021, Trump spent the subsequent years thinking not just about politics but about the policies he will pursue in his second term in office. Like him or loathe him, Trump has become a serious president with seriously transformative objectives. Until Albanese accepts this, simply meeting and getting along with Trump will not achieve the concessions nor carveouts that the Labor government is hoping for.
The point is that if the Albanese government wants to do well with the Trump administration on defence and trade issues, it is less about personality or diplomatic tactics and more about policy substance.
Trump’s tactics can be whimsical or sometimes incoherent, but his objectives are not. Indeed, he has held on to two core beliefs for a long time and is determined to advance and entrench these before his term ends.
The first is about alliances and defence arrangements. I argued back in November that Trump and his administration will conduct a ruthless audit of allies. This is what he is doing now, including with the AUKUS agreement. This means exerting considerable pressure on countries to bear a greater security burden by making American assistance and protection conditional on doing so. No matter how well Albanese gets along with Trump when they eventually meet, there is no finessing or getting around this audit.
There are some issues that Albanese cannot avoid. The defence spending figure of 3 per cent of GDP that US Under Secretary of Defence for Policy Elbridge Colby believes is needed for Australia (the same person leading the AUKUS review) or 3.5 per cent suggested by Secretary of Defence Pete Hegseth are not plucked from thin air. Australia’s Defence Minister Richard Marles’ response that the Labor government will decide its level of spending based on strategic needs rather than any arbitrary benchmark will not be accepted by the Trump administration. As I have been constantly reminded by those currently in the White House and Pentagon, Australia’s own strategic assessments demand a defence budget of at least 3 per cent of GDP.
US Navy Virginia-class submarine USS Minnesota alongside Fleet Base West in Western Australia (Connor Morrison/Defence Department)
Furthermore, the audit is not just about spending but assessment of allied intent and preparedness to bear risk and cost. The AUKUS review is not about punishing Australia. It is about seeing whether selling nuclear-powered submarines to Australia weakens the military balance in Northeast Asia between China on the one hand and the United States on the other. Colby has argued: “A green asset is an ally. But there’s nothing like a blue asset. Blue means it’s ours.”
To be fair, it is highly unusual for any country to offer ironclad military commitments to an ally for hypothetical conflicts. But the US fear is that Australia is weakening its existing forces to fund Pillar 1 of AUKUS. Viewed together, all the US complaints paint a poor picture: inadequate defence spending, the slow pace at which Australia is developing joint assets on its territory, and lack of preparedness to confront China even when PLA Navy warships circumnavigate Australia and conduct live fire exercises. Is Australia an ally that is pulling its weight, meeting promises to contribute to a common deterrent effort against China, and therefore deserving of the right to buy some of the US’s most prized naval assets?
It is not about better diplomacy. If Albanese wants to strengthen the alliance vis-à-vis the Trump administration and increase enthusiasm for Pillar 1 of AUKUS, he needs credible answers to these questions, which only the redirection of national resources towards defence can offer.
Similarly, regarding trade, a good personal relationship with the President and pointing to Australia’s trade deficit with the US is less relevant than it was during Trump 1.0. In Trump 2.0, the highest priority when it comes to trade policy is to fast-track American reindustrialisation. This is behind the administration’s plans for tariffs that will incentivise the production of steel and aluminium in house. The necessary corollary of Trump’s reindustrialisation ambition is to counter Chinese over-production and to move supply chains out of China, the world’s leading manufacturer.
Trump’s trade advisers are aware Australian commodity exporters have done extremely well from a Chinese economic model hooked on fixed investment and over production. As one said to me recently, Albanese never criticises highly distortive Chinese industrial policies such as subsidies but is happy to put out a media release condemning Trump’s tariffs. This will be an awkward conversation for the Albanese government.
The point is that if the Albanese government wants to do well with the Trump administration on defence and trade issues, it is less about personality or diplomatic tactics and more about policy substance. Trump won back power promising fundamental changes in defence and trade which the Albanese government seems to have initially ignored, played down, or dismissed. The Labor government has subsequently been caught unprepared and not yet able to secure a face-to-face meeting with Trump as other more proactive world leaders have managed. Regardless of whether Albanese gets that meeting next week, the pressure on Albanese to spend more on defence and contribute more to the goal of American industrialisation increases.
About the author
John Lee
Dr John Lee is a senior fellow at the Hudson Institute in Washington DC.
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