At stake is a AU$368 billion (US$239 billion) agreement struck in 2021 to bolster Australia's naval capacity with nuclear-powered submarines sourced and developed in collaboration with the United States and the United Kingdom. Although framed as a decades-long initiative designed to cement strategic deterrence in the Indo-Pacific, AUKUS must now navigate the churn of changing administrations and shifting geopolitical winds.

According to a report published by the Financial Times, the formal review of the program to assess whether the United States should scrap it altogether. The review is being overseen by Elbridge Colby, a senior defense official who, sources say, has previously voiced doubts about the program’s viability.

Marles, for his part, is unwavering. In a recent radio interview, he emphasised that the pact serves the strategic interests of all three nations. His confidence, however, must now contend with bureaucratic reality. The Pentagon is evaluating whether the United States can afford to spare submarines for Australia while failing to meet its own Virginia-class production targets. Elbridge Colby, a prominent hawk and Trump policy adviser, will reportedly spearhead the audit - raising concerns that military capacity may be prioritised over diplomatic continuity.

A diplomatic balancing act at the G7

This review arrives at a diplomatically delicate moment. Prime Minister Anthony Albanese is poised to meet President Trump at the G7 summit in Canada, where he will be pressed to lift defence spending from the current 2.3% to an ambitious 3.5% of GDP. The opposition in Canberra is already using the occasion to amplify its calls for greater investment, while the U.S. pushes forward with plans to station four submarines at a base in Western Australia by 2027.

The industrial dimension of AUKUS is not to be overlooked. Australia has already made an initial $500 million payment towards U.S. shipyard expansion, with a further $2 billion due in 2025 to accelerate Virginia-class output. Marles insists the pact will generate thousands of jobs across both nations - an argument he hopes will resonate with a Trump administration increasingly focused on domestic economic gains.

Doubts surface over long-term commitment

Yet the picture is not wholly reassuring. Analysts such as John Lee of the Hudson Institute point out that the review is as much about American capability as Australian commitment. With questions lingering over Australia's readiness to support a Taiwan contingency and its comparatively low defence outlays, some in Washington see Canberra's enthusiasm for AUKUS as more rhetorical than material.

Even voices sympathetic to the alliance are growing circumspect. John Hamre of the CSIS noted a perception that the Albanese government has been supportive of AUKUS “but not really leaning in” - a euphemism for diplomatic enthusiasm not yet matched by financial resolve.

However, in a note, Jefferies said it believes that the program is likely to go ahead, given lack of viable alternatives available to Australia, "although they may accept their delivery timeline being pushed back/deprioritized."

The broader strategic calculus endures. From 2032, Australia aims to acquire three U.S. submarines, before transitioning to a jointly developed AUKUS-class vessel with Britain, expected to enter service by 2040. Former Prime Minister Scott Morrison, who brokered the original deal, urged the government to rearticulate the strategic rationale for AUKUS - an appeal as much to the court of public opinion as to the Pentagon.

France, one suspects, is watching the unfolding drama with a measure of quiet schadenfreude. After all, it was Paris that suffered the indignity of seeing its $65 billion submarine contract with Canberra torn up in favour of the AUKUS pact—a decision French officials decried as a betrayal between allies. Now, with Washington reportedly wavering on its commitments and doubts growing in Australia over whether the promised nuclear-powered submarines will ever materialise, the tables appear to be turning. The strategic snub that once humiliated France is beginning to look less like a masterstroke of alliance-building and more like a cautionary tale of trans-Pacific overreach.