AUKUS Pact Faces Production and Funding Hurdles Under Trump Tariffs and US Capacity Concerns
Published on 4.17.25
The agreement's success hinges on the ability of the US to boost submarine production to meet its targets, which has raised concerns among analysts. Australian Defence Minister Richard Marles has expressed uncertainty about the US' capacity to deliver on this promise, citing potential delays and increased costs.
Donald Trump's warning that his tariffs could increase the cost of submarines acquired under the AUKUS pact adds to the complexity of the situation. The US administration's request for additional funding to improve Australia's submarine shipyards further complicates matters.
Elon Musk's team will review US submarine capacity as part of the agreement, but this may not be enough to address the underlying issues. US Defence Secretary Pete Hegseth's unease about selling submarines to Australia due to lagging US production and growing threats to American interests underscores the challenges facing the AUKUS pact.
Australia's Prime Minister Anthony Albanese remains committed to the program, citing its stealth capacity as a key advantage in projecting strength and reliability as a partner for Five Eyes nations. However, the agreement faces opposition from "naysayers" and a slow-moving defence establishment, with some questioning its effectiveness in countering China's growing influence in the region.