US AUKUS review to focus on WA facility upgrades

In yet another development in the US AUKUS review saga, US officials are concerned that the development of WA infrastructure to support visiting UK and US nuclear submarines is moving too slowly. Former US Navy secretary during the first Trump administration, Richard Spencer said this week a better maintenance network, of which the Australian facilities are a part would help alleviate Pentagon concerns about building enough nuclear-powered submarines to meet domestic demand before delivering second-hand vessels to Australia from 2032. Spencer said it was time for Australia to accelerate facility upgrades, suggesting while writing cheques for UK and US industry support was all very well, so was moving dirt and developing drydocks in WA. According to the Australian Financial Review the US Navy has broadened its evaluation of the AUKUS accord to include whether maintenance rates (including in Australia) could be an additional factor in ensuring the American fleet is at full strength in the event of a war with China. An estimated A$8 billion will be spent upgrading the HMAS Stirling base, as the home port for visiting UK and US submarines as part of SRF West from 2027. The Henderson shipyard will also be a major shipbuilding location and maintenance hub. The Albanese government has budgeted A$127 million over three years from 2024 for planning and feasibility studies so far – though government suggests the HMAS Stirling upgrades are needed more urgently than those at Henderson. None other than AUKUS architect and former prime minister Scott Morrison has also said Henderson could be used to repair US submarines, not just Australian vessels. US submarine industry construction rates must lift to 2.3 a year to ensure sales to Australia do not weaken the US navy’s fleet, but they have lagged below 1.5 for years.

Australia dodges bullet on US baseline tariff

Australia dodged a bullet in US president Donald Trump’s tariff crusade when Australia’s baseline tariff was left on hold at 10 per cent this week. The reprieve came even after the US President foreshadowed the previous week that those countries that had not done a trade deal with the US (like the UK or Japan) would face a higher baseline tariff rate of 15-20 per cent. Trade Minister Don Farrell was quick to say the calm approach of the Albanese government had paid dividends – namely the efforts to convince the US that it had a huge trade surplus with Australia and higher tariffs would simply be an act of self-harm for US consumers. Minister Farrell said Australia would continue its campaign to secure tariff carve-outs for Australia. However, the US government did impose a 50 percent tariff on semi-finished copper imports from August 1, though stopping short of imposing it on refined copper. Australian Defence industry is already having to cope with a 50 per cent tariff on aluminium and steel. AIDN has urged both the US and Australian governments to take a step back from the tariff dispute in order to ensure vital defence trade is not held back by border cost imposts. President Trump also indicated earlier this month that another ten categories of imports including unmanned aircraft and parts and pharmaceuticals were being reviewed to see if they too should face costly tariffs.

Japan wins frigate bid

Japan’s Mitsubishi Heavy Industries (MHI) was announced as the winner of the $10 billion, 11 vessel general purpose frigate program. Alas there should not be any substantial work for SME’s for a while as the first three ships will be built in Japan for delivery to the Royal Australian Navy – the first in 2030 and the next two by 2034. However, after that a further eight will be built at Henderson in WA by Australian shipbuilder Austal. Defence sources suggested this week that the Japanese ship the Mogami class frigate had won the contest with the German A-200 Meko because of superior firepower and because it involved fewer crew. Fostering a stronger Australia-Japan relationship was also cited as a factor by the Deputy Prime Minister and Defence Minister Richard Marles. The upgraded Mogami class ship will be able to carry 128 air defence missiles and boasts 32 vertical launch missile slots. The ship has a range of 18,000km compared to the Anzac’s 11,000km. The Mogami warships are crewed by 90 sailors, significantly fewer than the 170 required to operate the Anzac class. MHI has never built ships in a foreign country, but it has previously exported ships to the United States. The Albanese Government and Mitsubishi will now enter negotiations with a view to finalising a contract by the end of 2025 or early 2026.

Talisman Sabre winds up Putin

A successful 11th Exercise Talisman Sabre involving 19 countries and 40,000 troops wound up this week but not before eliciting a response from the Russians. Apparently, the Australian hosted exercise involved the deployment of short to intermediate missile launchers in live fire exercises. That along with US President Donald Trump’s decision to deploy a couple of US nuclear submarines near Russia in an effort to make Moscow think twice about its continued illegal bombardment of Ukraine set Russia to tearing up its restrictions on the deployment of its own short and medium range missile systems. In a statement issued on Tuesday by the Russian Foreign Ministry Russia said it no longer considered itself bound by the restrictions and would begin deploying the mid-range missile launch systems (pointing at Ukraine but also neighbouring NATO countries). US President Donald Trump has set the end of this week as the deadline for Russian President Vladimir Putin to agree to negotiations over a ceasefire in Ukraine or face tougher economic sanctions.

Exercise provides an industry first

For the first time, selected Australian defence industry companies showcased their capabilities at Exercise Talisman Sabre. Australian and international defence ministers, military leaders and senior officials attended demonstrations as part of the Industry and Defence Science and Technology Showcase held at Queensland’s Gallipoli Barracks. Industry delegates showcased their world-leading capabilities to trusted partners from more than 19 nations. First Assistant Secretary Industry Engagement Division, Capability Acquisition and Sustainment Group, Michael Howell said Australia’s ability to deliver advanced defence capabilities was underpinned by domestic and international partnerships. Mr Howell said Australian defence industry was essential to delivering and supporting Australia’s national security by delivering and sustaining the capabilities Defence relies on. He encouraged further Australian companies to get involved in future iterations of Exercise Talisman Sabre and other Defence exercises.