Albanese, Trump continue best of ANZUS tradition

Helped by fortuitous timing, the strength of Australia’s strategic and economic relationship with the US was reinforced for the long term by the constructive meeting between Anthony Albanese and President Donald Trump at the White House on Monday, Washington time (Tuesday AEDT). It took place against the backdrop of the growing military threat of China in the Indo-Pacific and Beijing’s weaponisation of critical global supply chains, threatening the industrial and military strength of the US and its allies.

On Tuesday, China brazenly defended what it called “powerful countermeasures” to expel an Australian Poseidon surveillance aircraft from airspace Beijing claims as its own over the South China Sea on Sunday, when a PLA fighter jet fired flares into the path of the Australian plane. Chinese propagandists lauded the PLA crew’s provocative, outrageous behaviour, casting Australia as a “small country” in need of “a lesson”. The Albanese government has protested to Beijing and the Chinese embassy in Canberra after the PLA-Air Force Su-35 fighter jet released flares in proximity to the RAAF aircraft, in an action Defence Minister Richard Marles said was “unsafe and unprofessional”.

In his bilateral meeting with the Prime Minister, Mr Trump, keen to secure a trade deal with China at his meeting with Xi Jinping at the Asia-Pacific Economic Co-operation summit in South Korea next week, played down the Chinese threat and dismissed the prospect of Mr Xi retaking Taiwan. He even suggested AUKUS would not be needed to deter Beijing. This was at odds with messages conveyed to Australia by US Defence Secretary Pete Hegseth and Under Secretary of Defence for Policy Elbridge Colby. At the Shangri-La Dialogue in Singapore in May, Mr Hegseth said it was public information that “Xi has ordered his military to be capable of invading Taiwan by 2027” and the PLA was “training for it every day”. But despite his apparent relaxed attitude towards China, Mr Trump, in his meeting with Mr Albanese, endorsed the $368bn AUKUS pact, which involves the future rotation of US and British nuclear-powered submarines through Australia and our purchase and building of several of our own. Mr Trump said AUKUS was “ moving along … very well”.

Mr Albanese’s measured, friendly style – neither obsequious nor too reserved – suited the encounter with Mr Trump, who can be volatile and unpredictable. Philosophical and ideological differences between the property tycoon and the Labor Left leader, and their differences over Palestine and climate change policy, did not feature alongside the most important outcome of the meeting: a rare earths agreement they signed that could herald a new phase of Australia’s mining prosperity.

The intent of the $US8.5bn ($13.5bn) agreement is to break China’s monopoly position on global trade in many of the inputs that are essential in a world dependent on digital technologies. Australia identified the critical minerals supply chain issues early in deliberations about how to respond to Mr Trump’s global trade war positioning. On this score, delays in the timing of a meeting between Mr Trump and Mr Albanese were ultimately to our advantage after Beijing shocked the world by giving notice of its plan to exert much greater control from December over global rare earth and critical mineral supply chains. As Joe Kelly reports, US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer have warned China’s move could halt the supply of smartphones, cars and even household appliances across the globe. It also endangers the production of weapons, including drones and fighter jets.

For Australia, the rare earths and critical minerals agreement has the potential to kickstart a major new industry as well as deliver on our shared strategic interests with the US and European allies. But it will require a good measure of trust and for government to be prepared to match the market-rigging behaviour of the Chinese Communist Party. Under the deal signed in Washington, Australia and the US have agreed to a “common policy framework”. This will involve intensifying efforts to accelerate the secure supply of critical minerals and rare earths. The US and Australia will “mobilise government and private sector support including for capital and operational expenditures via guarantees, loans or equity; finalisation of offtake arrangements; insurance; or regulatory facilitation”. Government will be involved in identifying projects of interest and provide the first $US1bn of funding within six months. Project approvals will be streamlined and participants will work to “protect their respective domestic critical minerals and rare earths markets from non-market policies and unfair trade practices”. This will include the adoption of “price floors” or similar measures.

The critical minerals deal was the headline feature of the Trump-Albanese meeting. But it is a handshake deal rather than a formal treaty. Either party can discontinue its participation with two weeks’ written notice. And the plan “does not constitute or create rights or obligations under domestic or international law, does not give rise to any legal process, and does not constitute or create any legally binding or enforceable obligations, express or implied”. This is instead a common understanding between allies that can be easily changed if circumstances warrant.

Such detail did not detract from the atmospherics of the Albanese-Trump meeting, which could have been much different. Disagreements over Australia’s precipitous recognition of a Palestinian state did not rate a mention. This indicates Mr Trump has moved on from his diplomatic success in the Middle East with the release of living hostages. He has re-engaged with the war in Ukraine where, like the Middle East, Australia has little by way of diplomatic heft. The meeting underscored the extent to which we share common interests on the world’s biggest economic and security threat, which is China. While Mr Trump was downplaying the immediate threats, his administration has shown it is in no doubt about the real state of affairs.

Australian security and defence officials are in no doubt, either, emphasised by events in the South China Sea. But Australia is forced to tread a careful line between two great powers. In July, immediately before Mr Albanese headed off on an extended visit to China, he misstepped in an ill-timed, poorly articulated speech that explored changing alliances under prime minister John Curtin. But he has now shown he has the diplomatic skills to deal effectively with Mr Trump, leader to leader. The results of their first official meeting are as good as could have been hoped for. The opportunity is now there to nurture the fruits of the economic, diplomatic and security agreements that have been struck.