President Donald Trump’s new restrictions on high-tech exports are undercutting Australia’s submarine project under the Aukus deal. The US, UK, and Australia recently relaxed defense trade regulations, but submarine technology is still out of bounds. These restrictions delay joint work on US Virginia-class subs and exclude Australian firms from the supply chain.
Australia has to pay $2 billion by 2025 to subsidize US shipbuilding. But techno-access and manufacturing delays cast the timeline into question. The Aukus alliance now threatens to be delayed, even as top US defense officials consider it crucial in countering China in the Indo-Pacific.
US export rules block key tech
The US eased 70% of its defense export regulations with Australia last year. However, the most sensitive topics—such as submarine technology—are still off the table in the Excluded Technology List.
Australian businesses are not allowed access to the information or components required to be able to contribute to US-made submarines, even if they produce such components. Kylie Wright, assistant secretary of Australia’s defense industry, confirmed that submarine technology is still off-limits.
Even after pilot programs initiated by the US Navy, Honeywell, and HII to assist Australian companies in adhering to security standards, development is slow.
Billion dollars deal in jeopardy
Australia committed $3 billion to assist in increasing US submarine production. It has to deliver $2 billion of that by 2025. But the technology bottlenecks and sluggish progress make it difficult for Australia to hold up its end of the deal—and cast doubt on the promised submarines ever being delivered on schedule.
Australia’s Submarine Agency asserts that technology transfer is the secret to Aukus’s success. Veem and other companies are attempting to qualify for US work by demonstrating that they can secure information. CEO Trevor Raman stated that Veem produces the same parts that are holding up US builds. He thinks their skills will ultimately be crucial.
Strategic stakes in the Indo-Pacific
US Indo-Pacific Command’s Admiral Samuel Paparo stated Aukus’s greatest victory is enabling US submarines to deploy from Australia by 2027. That base would provide direct access to the South China Sea—strategically crucial for preventing Chinese aggression.
But unless the US removes crucial tech hurdles, Aukus’s potential may be undermined. Trump’s “America First” emphasis on native shipbuilding threatens to hold back modernization in Australia—and dilute one of the strongest defense partnerships in the Indo-Pacific.
