This post is an update on the AUKUS saga that I wrote about, back in May 2025. Do you think the Australians are wishing they had stuck with their agreement with the French?
As the ink dries on Australia’s multi-decade submarine commitment under the AUKUS pact, new political winds out of Washington are shaking the foundations of what Canberra once saw as a strategic guarantee. Under the returning Trump administration, the U.S. is pushing to renegotiate the financial terms of the agreement and is reportedly seeking to insert a wartime control clause, raising fresh concerns about Australia’s sovereignty and strategic independence.
The heart of the issue is money. While Australia has already pledged over US$500 million to help expand U.S. submarine production capacity, Trump’s team is now demanding far more, up to US$2 billion in new payments, as a condition to secure delivery of three to five U.S. Virginia-class nuclear submarines from 2032 onward. These funds would be directed to bolster American shipyards, particularly in Virginia and Connecticut, which remain overextended and under pressure to deliver on U.S. Navy contracts.
The financial squeeze isn’t the only concern. Reports have surfaced in The Australian and News.com.au that a so-called “China clause” may be under quiet negotiation. This clause would give the U.S. the right to reclaim or restrict Australian use of the submarines during a major conflict, particularly one involving China. While the Pentagon has not confirmed the existence of such a clause, the possibility alone has ignited alarm among Australian defense experts and former leaders.
Former Prime Minister Malcolm Turnbull, an early critic of the AUKUS pact, warned that the submarine deal risks becoming a one-sided arrangement in which Australia pays heavily to host, maintain, and eventually crew American subs, without ever holding true operational control. Bob Carr, another former senior figure, was blunter: if the clause is real, it would render Australia’s billion-dollar fleet a “rental service” for U.S. war planners.
Current officials, including Defence Minister Richard Marles, have sought to play down the growing controversy. He insists the U.S. review is “routine” and that Australia remains committed to the AUKUS vision. But behind closed doors, pressure is mounting. Canberra must now decide whether to comply with the new financial demands and legal caveats—or begin preparing for a prolonged diplomatic standoff.
Meanwhile, in the U.S. and U.K., the shipyards and surrounding real estate markets continue to benefit from AUKUS-linked investments. The U.S. gains not only geopolitical leverage but a quiet economic windfall, as the influx of Australian capital fuels job creation and property demand in key production zones like Newport News, Virginia and Barrow-in-Furness in the UK.
What began as a trilateral alliance of equals now looks increasingly like a bargain between a landlord and tenant, with Australia footing the bill for the privilege of being an American ally. As the strategic calculations shift and Trump’s transactional style returns to the global stage, Australia’s AUKUS submarines may be powerful, but only if Canberra retains the keys.
Sources:
• News.com.au
• The Guardian
• The Washington Post
• The Australian
• Economic Times
The Rowanwood Chronicles 