Australia between America and China

Australia sells about a third of its exports to China and relies for its defence on the United States. For twenty years it managed both. Since 2020 it has been punished by each in turn: by China with trade bans after it asked for an inquiry into the pandemic, by the United States with tariffs despite buying more from America than it sells. In 2021 it staked its future defence on nuclear-powered submarines to be supplied by the United States and Britain, a project of thirty years whose suppliers are now behind schedule and reconsidering. In the island states of the South Pacific, which Australia has long treated as its own neighbourhood, it is competing with China treaty by treaty.

Where it stands · September 2026

Australia's defence minister and the US defence secretary backed an expanded US military presence in Australia, and Australia's defence chiefs endorsed it. Australia pushed for condemnation of a Chinese missile test. A Sydney businessman was jailed for foreign interference, the first conviction under that law. The United States intervened against Australia's opt-out algorithm law. Anthony Albanese announced $60m more for Ukraine at a meeting with Zelenskyy.

What the dispute is about

The submarines. Australia is to buy three to five American boats in the 2030s and build a new British design after that, at a cost of up to 368 billion Australian dollars. American yards build fewer submarines than their own navy needs, and the law lets a president withhold the sale.

Trade and security pulling apart. China buys Australia's iron ore, and has shown it can stop buying its wine, barley, coal and beef. Australia has barred Chinese companies from its telecom networks and has now ordered Chinese investors out of its rare earth mines, which it is developing with American money.

The Pacific. After Solomon Islands signed a security agreement with China in 2022, Australia offered island states money, migration rights and defence guarantees in exchange for a veto over their security ties with others.

How each side explains it

The Australian government's account

Australia wants a stable relationship with China and has restored trade and dialogue without giving ground on its interests. China is carrying out the largest military build-up since 1945 without explaining its purpose, has sailed warships around Australia and fired missiles into the Pacific. The alliance with the United States and the submarine partnership are the answer to that, and have the support of both major parties. Australia is the Pacific's partner of choice because it lives there and gives most of the aid.

In our coverage

China is a strategic competitor; firmness, derisking and export controls justified →680 headlines
Covered by:ABC News · Mining.com · Sydney Morning Herald · Reuters · Nikkei Asia · The Guardian

Beijing's account

China is Australia's largest customer and has never threatened it. The trade measures were ordinary remedies against dumping, since lifted. The submarine pact hands weapons-grade nuclear material to a state without nuclear arms, breaches the spirit of the non-proliferation treaty and brings a cold-war alliance into the Pacific. Exercises on the high seas are lawful, as Australian ships in the South China Sea claim for themselves. Pacific states are sovereign and need nobody's permission to choose partners.

What each account leaves out

The government's leaves out that the first submarines depend on a future American president certifying that his own navy can spare them; that the programme's cost has no precedent in Australian history and its British half is in difficulty; and that its new Pacific treaties buy a veto over small states' foreign policy with aid and visas.

Beijing's leaves out that the trade bans began within weeks of Australia's call for a pandemic inquiry and were lifted when the government changed; the list of fourteen grievances its embassy handed to Australian journalists in 2020; the live firing under a busy air route in 2025 with minutes of warning; and the convictions in Australian courts for covert work on its behalf.

The critics' leaves out that the French boats were years late and over budget when cancelled; that opinion polls show most Australians still support the alliance; and that they offer no agreed alternative for a continent with a small population and long sea lanes.

The Pacific governments' leaves out that several have played the two suitors against each other with skill and profit, switching recognition from Taipei to Beijing in exchange for aid, and that policing agreements with China have been kept secret from their own parliaments.

The ledger

Australia

Wanted: China's market and America's protection.
Gained: trade with China restored, a ring of Pacific treaties, new partners in Europe and Japan.
Paid: billions already sent to American and British shipyards, tariffs from its ally, and a defence plan that rests on decisions to be made in Washington and London.

China

Wanted: an Australia that trades and stays out of its disputes.
Gained: the trade.
Paid: an Australia more closely tied to American forces than at any time since 1945.

The United States

Gained: bases, a shipyard subsidy and a rare earth supplier.

Words in dispute

Names and terms the sides do not share. This page keeps them out of its own voice.

partner of choice / backyard
stabilisation
foreign interference
economic coercion / trade remedies
nuclear-powered, not nuclear-armed / proliferation
Pacific family
sovereign capability

Events per week

Per-week distribution of events. Click a bar to see that week's top events.

Click a week bar to select. Light blue = active week.

Week of Sep 28, 2026(7)

Hegseth calls US-built nuclear submarines the ‘apex predator’ of the seas. But are they right for Australia?

1 sourcesOct 4, 2026

Lindian powers up Malawi rare earths as production looms

1 sourcesOct 1, 2026

Australia's Lynas looks to Brazil with Meteoric Resources takeover bid

1 sourcesOct 1, 2026

North Korean hackers steal millions in crypto heist - ABC News & Headlines – Australian Broadcasting Corporation

1 sourcesSep 29, 2026

New Zealand, Australia sign pact to deepen naval cooperation

1 sourcesSep 29, 2026

CBA, Fortescue, Telstra, BHP lead $40bn dividend windfall as investors pivot to income shares

1 sourcesSep 28, 2026

Superintendent - Coal Mining | Peak Downs | BMA at BHP Group