Under the Aukus deal Australia is expected to purchase as many as five Virginia-class nuclear-powered submarines from the United States. Photo / Paul Hennessy, SOPA Images, LightRocket via Getty Images
A Pentagon review of the multi-billion-dollar deal for the United States and Britain to supply Australia with nuclear-powered submarines has unsettled a key ally as China ramps up its naval ambitions for regional dominance.
In Washington, the review reflects a concern among Trump Administration defence officials and China-focused lawmakers: that the terms of the deal might leave the US without enough of its own ships and submarines to face off against Beijing’s swelling supply.
A senior US defence official said the Pentagon is reviewing the Biden-era Aukus agreement to ensure it is “aligned with the President’s America First agenda”, and that allies “step up fully to do their part for collective defence”.
The official echoed a broader agenda spearheaded by Defence Secretary Pete Hegseth that argues the US needs to prioritise its own needs over those of others and compel allies to contribute more to their own defence.
The uncertainty, analysts say, is amplified at a time when the Administration is reshuffling its commitments in Europe and urging key allies to spend more on defence - including Taiwan and Australia - as Trump officials refocus US strategy on the Indo-Pacific and the growing threat from Beijing.
China’s naval fleet now outnumbers that of the US, with more than 370 vessels.
China lags behind the US in overall vessel tonnage and technological sophistication, including in its undersea fleet, with just 12 nuclear-powered submarines compared to more than 65 operated by the US Navy.
“The US is not building enough submarines as per its own needs. And in the US shipbuilding industry, the increase that’s needed to produce for its own needs, let alone have the additional capacity to hand over Virginia-class submarines to Australia, that is a well-known problem,” said Nishank Motwani, a Washington-based analyst for the Australian Strategic Policy Institute (ASPI), a government-funded think-tank.
Aukus includes a long-term goal for Australia to develop its own nuclear-powered submarines in the 2040s, with US-made submarines to be sold to Australia in the interim, as soon as 2030.
The agreement also encompasses extensive technological co-operation across other areas of defence, broadly aimed at countering China’s growing influence in the Indo-Pacific.
The review of Aukus, first reported by the Financial Times, is being led by Elbridge Colby, the undersecretary of defence for policy.
He has previously voiced doubt about US plans to sell nuclear-powered submarines (SSNs) to Australia, arguing that America’s own fleet is insufficient amid the growing threat of Chinese military action in the Indo-Pacific.
The Virginia-class submarines that Australia is set to receive - including an initial purchase of three, with the option to buy two more to bridge the gap before British-designed SSNs arrive in the 2040s - are already behind schedule, US military officials say.
Each vessel costs roughly US$4.3 billion ($7.1b), and the US Navy’s goal of maintaining a 66-boat SSN fleet remains unmet, with the current force hovering around 50.
The proposed sale of up to five submarines to Australia would set back the US SSN force into the 2040s, according to estimates from the Congressional Research Service.
To meet that demand, the Virginia-class programme is aiming to produce two submarines a year by 2028 - and more than 2.3 annually in the years that follow to fulfil both US and Aukus requirements.
But those targets remain distant.
At an April hearing of the Senate Armed Services Committee’s sea power subcommittee, Navy Rear Admiral Jonathan Rucker, the Navy’s programme executive officer for attack submarines, said 14 Virginia-class boats are under construction - and output is averaging just 1.13 per year.
“The main causes for this are workforce challenges, material and supplier delays and shipbuilder facilities and infrastructure issues - all of which are driving cost increases and schedule delays,” Rucker said.
In a series of posts on X late last year, Colby raised doubts about the viability of US submarine sales to Australia, arguing that the American fleet is already stretched too thin to meet its own needs in the event of a Chinese invasion of Taiwan.
“In principle [Aukus is] a great idea. But I’ve been very sceptical in practice,” he said.
During his Senate confirmation hearing in March, Colby expressed conditional support for the Aukus submarine deal.
“If we can produce the attack submarines in sufficient number and sufficient speed, then great. But if we can’t, that becomes a very difficult problem,” he said.
In April, President Donald Trump signed a sweeping executive order aimed at reclaiming a share of the global shipbuilding industry from China - a daunting task.
China controls more than half of the world’s commercial ship production, driven by massive shipyards along its eastern coast. The US, by contrast, accounts for less than 0.1% of global shipbuilding output.
Lawmakers on both sides of the aisle have raised warnings that Beijing’s dominance in commercial shipbuilding emboldens its naval forces.
In April, the House Select Committee on the Chinese Communist Party praised the US trade representative’s decision to investigate an alleged Chinese shipbuilding monopoly.
Last July, former deputy secretary of state Kurt Campbell - who helped craft the Aukus pact - called the gap between US and Chinese shipbuilding capacity “deeply concerning”.
Democratic lawmakers have pushed back against the suggestion that unravelling the submarine pact would enhance US readiness in the Indo-Pacific.
They argue that the accord augments - rather than diminishes - America’s strategic reach in the region.
Part of the Aukus agreement includes building infrastructure to support US submarines in Australia. US vessels have already begun a series of visits to pave the way for Submarine Rotational Force West, an Aukus initiative in which US submarines regularly rotate through a base in Western Australia.
“If this Administration is serious about countering the threat from China - like it has said as recently as this morning - then it will work expeditiously with our partners in Australia and the UK to strengthen this agreement and ensure we are taking steps to further boost our submarine industrial base,” said Virginia Senator Tim Kaine (Democrat), who sits on the Senate Armed Services Committee.
“To walk away from all the sunk costs invested by our two closest allies - Australia and the United Kingdom - will have far-reaching ramifications on our trustworthiness on the global stage,” said Connecticut Representative Joe Courtney, the top Democrat on the House sea power and projection forces subcommittee.
The review of the Aukus pact comes amid tepid support for Australia’s defence efforts among senior Trump Administration defence officials, some of whom have expressed frustration with Canberra’s military commitments.
Australian officials last week downplayed reports of the Pentagon review, emphasising that Aukus has received consistent bipartisan support in the US and remains backed by the Trump Administration.
“It is natural that the Administration would want to examine this major undertaking including progress and delivery, just as the UK Government recently concluded an Aukus review and reaffirmed its support,” said Defence Minister Richard Marles in a statement.
“We look forward to continuing our close co-operation with the Trump Administration on this historic project,” he added.
In a separate interview with Australia’s ABC Radio, Marles said that he had been aware the project - launched in 2020 under President Joe Biden - had been under review “for some time”.
Marles travelled to Washington in February to meet Hegseth, delivering a US$798 million payment - the first instalment of Australia’s US$4.78b commitment for the submarine deal. At the time, Hegseth said Trump was “very supportive” of the deal.
Since then, Hegseth has chafed at Australia’s defence spending, urging the nation of 26 million to raise its military budget to at least 3.5% of GDP - up from roughly 2% - echoing earlier calls by Colby for a figure above 3%.
Australian Prime Minister Anthony Albanese pushed back, insisting that Australia will set its own defence policy.
Scrutiny of the US-Australia defence partnership is intensifying ahead of this week’s Group of Seven summit in Canada, where Albanese and Trump are expected to meet in person for the first time.
The review also comes as China makes increasingly assertive moves at sea, pushing its naval presence deeper into waters near US allies and expanding its reach far beyond its own shores. Last week, Beijing deployed two aircraft carriers into waters near Japan for the first time - rattling Tokyo.
Earlier this year, a Chinese flotilla of three warships conducted an unprecedented patrol through international waters off Australia’s east coast, drawing a sharp rebuke from the Australian Government.
“Australia was made to feel very unsafe and threatened,” ASPI’s Motwani said. “Every day the reality is sinking in that [the delivery of Aukus submarines] is still eight years away - best-case scenario.”
Michael Miller in Sydney contributed to this report.
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