The Pentagon’s decision to examine whether the £176 billion defence agreement ‘AUKUS‘ has unsettled British and Australian allies who thought they had secured Washington’s commitment.
Defence Secretary Pete Hegseth has made it clear that allies must "step up fully" for collective defence, whilst the Pentagon ensures the agreement serves American interests first.
Trump Administration Questions AUKUS Foundation
The AUKUS pact seemed like a done deal when Biden, Morrison, and Johnson signed it in 2021. The trilateral agreement promised Australia three to five Virginia-class submarines from the early 2030s, alongside joint development of next-generation submarines using shared technology.
Yet Trump’s team has different priorities.
The Pentagon stated it is reviewing the agreement "as part of ensuring that this initiative of the previous administration is aligned with the president's America First agenda".
This means checking whether America’s military readiness comes first, whether allies pay their fair share, and whether the defence industrial base meets US needs.
Industrial Capacity Concerns Drive Review Process
America’s submarine production struggles make the review more pressing. Elbridge Colby, the Pentagon’s undersecretary leading the review, has questioned whether the U.S. can meet its own submarine needs, let alone Australia’s requirements.
The U.S. Navy faces serious production shortfalls. America cannot meet its own demand for nuclear-powered submarines, making the promise to supply Australia increasingly questionable.
Australia has already paid $520 million this year to boost American submarine production. The country committed $239 billion over three decades to the programme.
Yet these investments may not guarantee delivery if America’s own fleet requirements take priority.
Allies Show Mixed Responses to Review
Britain has played down the review, noting it conducted its own assessment after the Labour government took office.
A UK government spokesperson said it was "understandable" for a new administration to examine such a major partnership.
Australia’s Defence Minister Richard Marles remains optimistic. Marles told ABC Radio Melbourne that he was “very confident” the submarines would arrive in the early 2030s as planned. Marles argued that incoming administrations naturally review previous commitments.
Former Australian Prime Minister Scott Morrison, who signed the original pact, described the Pentagon's examination as a "departmental review, not a policy decision" that should not be overinterpreted.
Defence Spending Demands Complicate Relations
The Pentagon review comes alongside pressure on allies to increase military spending.
The U.S. wants allies to spend 3.5 per cent of GDP on defence. Britain has agreed to reach 2.5 per cent by 2028 and 3 per cent by the next parliament.
Australia faces tougher demands. Prime Minister Anthony Albanese has pledged only 2.4 per cent, insisting Australia will set its own defence priorities. This resistance may have prompted the pentagon to question Australia’s commitment to burden-sharing.
The spending row puts Australia in a bind.
Canberra has already reshaped its defence posture around the AUKUS agreement, moving resources from traditional forces toward long-range missiles and submarine capabilities. A cancelled or revised deal would leave gaps at the heart of Australia’s naval strategy.
Regional Security Stakes Rise with China
America’s wavering commitment, some might argue, plays into Beijing’s hands. China has consistently opposed AUKUS, viewing it as an attempt to contain Chinese influence in the Indo-Pacific.
Republican Representative Michael McCaul called AUKUS "the one bright spot" in Biden's foreign policy record. National security hawks see the pact as vital for maintaining Western technological superiority in the region.
If America pulls back from AUKUS, it would signal reduced commitment to Indo-Pacific security. This could embolden China whilst undermining allied trust in American reliability as a security partner.
Britain and Australia Must Prepare Contingencies
The Pentagon review puts allies in an awkward position. Both Britain and Australia have invested heavily in AUKUS, expecting American support for decades to come. Now they must consider what happens if Washington changes course.
Australia particularly needs backup plans. The country has already begun phasing out its Collins-class submarines, expecting AUKUS replacements to fill the gap. Without American submarines, Australia faces a serious capability shortfall just as regional tensions rise.
Britain’s position looks more secure. The UK announced a £7.69 billion investment in its nuclear submarine industrial base hours before the Pentagon review became public. This suggests Britain is preparing to carry on with or without full American participation.
Trump’s approach puts allies in an impossible position. Allies must increase defence spending to satisfy American demands whilst accepting that even generous contributions may not guarantee US support. Such a transactional approach treats partnerships like business deals rather than strategic alliances built on shared values and mutual trust.
The Pentagon review will likely recommend changes to AUKUS rather than outright cancellation.
America still needs allies in the Indo-Pacific, and scrapping the deal entirely would hand China a major diplomatic victory. Yet the review sends a clear message that America’s commitments depend on what America gets in return.
Britain and Australia must now grapple with an uncomfortable truth: even the closest allies cannot take American support for granted. The special relationship, it turns out, has strings attached.
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