Despite AUKUS boosting the US-led containment of China, Washington may still struggle to gain full support from its allies as economic woes bubble to the surface.
On March 13, US President Joe Biden met his British and Australian counterparts, Rishi Sunak and Anthony Albanese, to upgrade the AUKUS security pact designed to counteract China.
In effect, the advancement of the deal enables Australia to acquire nuclear submarines, embedding its navy with the US and UK navies while reinforcing the US-led alliance with the stated aim of ensuring a “free and open” Indo-Pacific.
Beijing warned the three countries were “going down a dangerous road” following the trilateral meeting, while President Xi Jinping recently warned the US-led containment strategy in the Indo-Pacific aimed to achieve “containment and suppression on our country” during China’s annual National People’s Congress.
Some observers perceive AUKUS as an attempt to protect the US-led world order and reinforce American hegemony in an increasingly important global power centre. Yet Washington and its regional partners have cited fears over China’s militarisation in the South and East China Seas, as well as a possible invasion of Taiwan.
In response, the US has focused on hard military power and defence partnerships with its regional partners.
Such partners, including India, Japan, and Australia – who fear China’s regional military projection – are stepping up their defence capabilities. Washington is also trying to outsource military development, with US companies setting up weapons manufacturing capabilities within partners like South Korea and Australia.
And there is deepening cooperation with Western allies like Canada, Australia and the UK over countering China through organisations like the Quad and AUKUS, which underpin the US-led security architecture.
Indeed, Washington has fiercely resisted China’s emergence as a manufacturing rival, and Joe Biden’s administration has continued many of Donald Trump’s protectionist policies from the 2018 trade war with Beijing. This has been pursued, in particular, by directly and indirectly blocking China’s access to important semiconductor items and technologies, thus attempting to slow Beijing's progress on advanced semiconductors.
In addition to tariffs, the White House has tried to establish a strategy that prioritises domestic investments in American industry and infrastructure to compete with Beijing.
Crucially, however, while the Biden administration prioritises defence partnerships to contain China, it could further lose out to China based on its economic strategy in the region and the desires of its partners to uphold trade ties with Beijing.
While there is recognition of the failures of US investment in the Indo-Pacific, Washington in early March announced Pacific states would get billions of dollars from its budget over the next 20 years, showing Washington is aware it should have a long-term economic approach to the region.
Despite the US trying to get Europe on board with countering China, the European Union (EU) has preferred a nuanced ‘competition and cooperation’ with Beijing. Germany has prioritised economic relations with China, which Berlin has seen as more necessary than ever amid the continent’s cost-of-living crisis, which has also hit German manufacturing.
Although US pressure has prompted some EU nations to decouple from Chinese technology, such as the Netherlands placing restrictions on Chinese semiconductors on March 9, it’s largely submerged by the EU’s desires to keep business with China open. Perhaps the only major contention between the EU and China, per Brussel’s Indo-Pacific foreign policy strategy, are those “where fundamental disagreements exist, such as on human rights”.
Even countries with a more active military presence in the Indo-Pacific, namely France and the UK, are somewhat cautious about fully following the US’ lead. French President Emmanuel Macron’s planned visit to China in the coming weeks is partly about getting China on board with ending the Ukraine war, highlighting Europe’s priorities of restoring security in the continent, and possibly seeing Beijing as an important partner in achieving this.
While the UK is currently a partner in Washington’s containment efforts, in recent years, it has drifted between a hawkish approach on China and stressing the importance of economic relations with Beijing, its largest source of imports.
Rishi Sunak recently called for “robust pragmatism” towards Beijing, seemingly a setback to the hawks who favoured London following Washington’s position on China.
Moreover, with various political shifts ongoing in the UK, including growing questions over its capabilities to commit to an Indo-Pacific naval presence given its substantial support for Ukraine, it would not be surprising to see London further alter its commitments to Washington’s vision.
Crucially, Washington must also face the reality of Beijing’s significant economic entrenchment in the Indo-Pacific region, even among US partners there.
On the one hand, Japan does have diplomatic grievances with China over some disputed regions. This is not only limited to Taiwan but also the Senkaku islands, which are managed by Japan but claimed by China, which calls them the Diaoyu.
Despite this, Tokyo is unlikely to ever explicitly oppose Beijing per Washington’s vision due to its own deep economic ties with China. It is, therefore, a mistake for political figures in Washington to approach Japan as though it wishes to pit itself directly against China.
And while Australia has expanded its commitment to US-led defence initiatives, it is important to note that China is by far Canberra’s largest trading partner, while both countries have recently attempted to patch up their tensions over trade.
And in a blow to Washington, Canberra has also stressed it would not step in if a conflict breaks out over Taiwan, despite its commitments to AUKUS, revealing the US may struggle to fully sway its allies over containing China.
Despite Washington’s current fixation on hard power as a deterrent, China has increasingly embedded its economic sway in the region. It has been the biggest trading partner of the 10-member Association of Southeast Asian Nations (ASEAN) since 2009. And by 2020, it had almost doubled the trade volume of that of the US with ASEAN.
And for all the talk of tensions with India, China’s bilateral trade with New Delhi also reached a record $136 billion in 2022.
China’s own trade with Asian countries, namely through the Regional Comprehensive Economic Partnership (RCEP), has offered lower tariffs on cheaper electronics and other consumer goods that are popular across Asia. As it is not part of the agreement due to its trade war with China, this also inhibits the US’s economic influence.
In contrast, the Indo-Pacific Economic Framework (IDEF), which the US announced in May 2022 to solidify its economic presence in the region, has flaws because it doesn’t provide such tariff reductions that China offers and instead focuses on issues like labour standards, clean energy, supply chains.
Some Indo-Pacific countries may even feel anxiety over Washington’s defence focus and its risks to regional stability. After the latest announcements over AUKUS, Indonesia expressed worries over the pact triggering a possible regional arms race as well as submarines having to pass through its waters.
Ultimately, aside from risks over further polarisation in the Indo-Pacific and the neglect of pressing issues like climate change, the US may struggle to offer an appealing alternative to China’s economic hegemony, dampening its hopes of acquiring the full support of its partners.
And while Washington may be seen as a valuable security partner, regional countries may act multilaterally and play the two powers against one another – a further reflection of the increasingly multipolar world we live in.
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