In his second incarnation as US President, Donald Trump will be more certain of his own instincts and much more demanding than the Trump we saw between 2016 and 2020. That is big news for Australia, particularly because of President Trump’s approach to alliances and what that might mean for the AUKUS subs deal. He is likely to see AUKUS as a deal America should get more out of than Joe Biden managed to get. Appeals to mateship and the unbreakable bonds of our alliance are unlikely to cut much mustard.
As President, Mr Trump is no longer going to be counselled and restrained by ‘adults in the room’ with deep experience on foreign, defence and economic policy. Instead of explaining history, precedent, policy and protocol to him as folk like General Jim Mattis and Mike Pompeo did in his first term, his new Cabinet and broader Administration looks like being full of people focused on delivering whatever The Donald wants, fast – once they know what that is.
But that oversimplifies things. Team Trump has plenty of discordant voices and differences of opinion on the big issues. China policy is an important example which will flavour the whole next four years. Treasury Secretary Bessent’s Wall Street background makes him an unlikely tariff zealot and also someone who will be reluctant to really push economic and technological competition with China. Elon Musk has one foot in China’s economy and one in America’s, so he’s unlikely to want a trade war.
Over at the State Department, though, Marcio Rubio has a long track record of recognising the danger of a rapidly arming and technologically rapacious China, and sees the US and China as engaged in deep military and technological competition that the US must win. He wants to see more economic and technological decoupling. The Pentagon’s new chief, Pete Hesgeth will want the same.
Those discordant views probably end up just giving Donald Trump exactly what he wants: manoeuvre room to make his own decisions in the moment. On China that might be all about a deep personal connection with fellow superpower chief Xi Jinping, with the two of them cutting deals they both like whatever their partners and allies might think. If that sounds like fanciful imaginings for how Xi Jinping will approach an America led by President Trump, then it’s useful remembering that Xi tried to get Barack Obama to do just this with his ‘New Model of Great Power Relations’ back in 2013.
That idea of doing what is best for America regardless of what it means for allies and partners is what everyone who voted for Trump’s America First vibe wants to see. And this is where things can get difficult, demanding and disruptive for Australia, our AUKUS deal and the defence budget. In his first term, Mr Trump pushed NATO allies hard to increase their defence spending from 2 per cent of GDP to 3 or 4 per cent. In 2025, he’s moved to talking about 5 per cent of GDP as the new benchmark. Australia is spending 2 per cent now, with the Albanese Government promising to raise that to 2.3 per cent over the next ten years. That looks anaemic in Trumpworld.
Before he was even inaugurated, Mr Trump had already shown a willingness to discount decades of deep security and economic cooperation with the closest of allies in his approach to Canada. Canada is a far more critical economic partner to the US than Australia. It’s also a NATO member and the country that works with America in NORAD, America’s key domestic defence arrangement. None of that has mattered, with Mr Trump mocking outgoing prime minister Trudeau, musing about huge tariffs on Canadian imports and suggesting America might take Canada over. We haven’t yet seen how any of this plays out now that Trump now has the powers of the office of the presidency.
So, what might we see out of the Trump Administration on Australia and our defence alliance? There’ll still be plenty of voices talking us up as a model ally, in Congress and scattered across the new Administration. But the bald figures around defence spending will make that a hard sell with the very transactional new President.
We could be lucky and find Trump and his core officials are way too busy with China, Europe, the Middle East, Japan and India to think much about what we are actually doing on and not doing on defence.
But an Australian prime minister meeting the President to lock in AUKUS and the early sale of US Virginia subs to our Navy will know that Mr Trump suspects every ally of free riding on the US and seeking special treatment at America’s cost. President Trump will be told the US still isn’t able to build enough submarines for its own Navy and will wonder how giving us any makes America stronger.
On top of that, Joe Biden negotiated and agreed the AUKUS deal, and Trump has withering scorn for Biden’s deal making nous. He’ll probably be tempted to show he can get a better deal out of us Aussies than sleepy Joe did, and he’s likely to sense he has enormous leverage over any Australian leader because no Australian leader can fail to keep AUKUS on the rails.
So, the next four years start now. Navigating the swirling currents of the Trump Administration will take a lot more than teary reminders about standing shoulder to shoulder in conflicts past. That $4 billion down payment we’ve handed over to the US for the AUKUS subs might turn out to just be the beginning of a new set of deals about the subs and about our military spending.
This article was first published in the Australian Financial Review.