Regional defences shift as tensions over Taiwan soar

US Defence Secretary Pete Hegseth’s call for Australia to raise defence spending to 3 per cent of GDP does not suit Anthony Albanese’s budget priorities. Nor does the Australian Strategic Policy Institute’s warning last week that the nation’s hollowed-out Defence Force is ill-prepared for a near-term conflict. The Prime Minister’s spending priorities are geared heavily to social policy and the care economy. But they are out of step with the times, and the nation’s security needs, as the strategic outlook continues to deteriorate. In light of China’s unprecedented armed forces build-up in the Indo-Pacific, and fears that Xi Jinping could imminently move to invade Taiwan and trigger a major global conflict, Australian and US security co-operation and military exercises have been elevated to a war footing, Geoff Chambers reports.

US-China relations sank to new lows at the weekend over tariffs and military expansion, with Mr Hegseth warning at the Shangri-La Dialogue in Singapore that Beijing was preparing to potentially use military force to “alter the balance of power in the Indo-Pacific”, and that it posed an “imminent” threat to Taiwan. Chinese leader Mr Xi has reportedly ordered the People’s Liberation Army to be capable of invading Taiwan by 2027. In response to Mr Hegseth, Chinese officials cautioned the US to not “play with fire” on Taiwan. But the signs of what could happen are clear. They include intensified military exercises by China around Taiwan; Beijing’s positioning of H-6 bombers, capable of delivering nuclear payloads, on islands in the South China Sea; frequent, crippling cyber attacks on Taiwan’s infrastructure; and a growing narrative in Beijing about “reunification”.

Labor plans to lift defence spending, currently at 2.02 per cent of GDP, up to 2.33 per cent by 2033-34. That is still well below the 3 per cent threshold demanded by the Trump administration and the level needed to redress ADF shortages in personnel and equipment, including munitions stockpiles, missile defence systems and long-range weapons. The good news from the Shangri-La summit, as Defence Minister Richard Marles said, is that AUKUS is on track and its timelines were being met. “What we are now seeing is more visits from American nuclear-powered submarines to Australia,” he said. And Mr Hegseth emphasised that the US was “reorienting towards deterring aggression by communist China”. The US, he said, “cannot look away, and we cannot ignore” China’s behaviour towards its neighbours. It was “an urgent wake-up call”.

He is right; countries in this region need to grasp what is happening and the defence spending that will be needed to counter it. For its part, the US has been strengthening its military presence in northern Australia, with 2500 marines rotating through the Northern Territory. Mr Hegseth revealed the US Army would soon conduct “its first live-fire test of its Mid-Range Capability system in Australia”, the first time that system is tested on foreign soil. Underlining the seriousness of the outlook, Mr Hegseth said more than 30,000 military personnel from 19 nations would participate in the 11th Talisman Sabre exercise, the largest ever, to be led by Australia and the US in July and August. It will be staged in Australia and, for the first time, in Papua New Guinea.

Yet the US should not be surprised if some countries – even those that count themselves longstanding, solid allies – wonder about the reliability of the Trump administration in light of its punitive tariff regime and the uncertain fate of Ukraine. Trade Minister Don Farrell was not alone at the weekend when he described Donald Trump’s announcement of 50 per cent tariffs on steel imports as “unjustified” and “not the act of a friend”. That is a common sentiment across the region, whose nations have been targeted by Washington’s tariffs, opening the way for China to step up economic ties.

Amid increasingly dangerous and uncertain times, Mr Marles claims to be “very much up for the conversation” with the US about Australian defence spending. But, as Peter Jennings writes, the Deputy Prime Minister has lost every conversation he’s had with cabinet colleagues about increasing defence spending. In response to Mr Hegseth, Mr Albanese said on Sunday: “What we’ll do is continue to provide for investing in our capability but also investing in our relationships in the region.” The Americans, Mr Jennings writes, “are acutely aware of the gap between reality and rhetoric. That’s the conversation Albanese wants to avoid in the Oval Office”. It is also the conversation he must have with the nation, in the interests of security.