Australia’s defense minister downplays concerns over Pentagon review of multi-billion submarine deal

BANGKOK (AP) - Australia’s defense minister dismissed concerns Thursday that a deal between the U.S., Australia and Britain to provide his country with nuclear-powered submarines could be in jeopardy, following a report that the Pentagon had ordered a review.

Australian Defense Minister Richard Marles told Sky News Australia that he had known about the review of the deal "for some time,” saying that it was a "very natural step for the incoming administration to take."

He noted that the UK’s government also reviewed the deal, the centerpiece of a three-way alliance known as AUKUS after it was elected, and that his own government had looked at it as part of its own review of Australia’s entire defense posture.

“I think an incoming government having a look at this is something that they have a perfect right to do and we welcome it and we'll work with it," he said.

The deal, worth more than $200 billion, was signed between the three countries in 2021 under then President Joe Biden, designed to provide Australia, one of Washington’s staunchest allies in the region, with greater maritime capabilities to counter China’s increasingly strong navy.

The deal also involves the U.S. selling several of its Virginia-class submarines to Australia to bridge the gap as the new submarines are being jointly built.

In January, Australia made the first of six $500 million payments to the U.S. under the AUKUS deal, meant to bolster American submarine manufacturing.

Marles met with U.S. Defense Secretary Pete Hegseth on the sidelines of a defense conference in Singapore less than two weeks ago, and told reporters afterward that he had come away with "a sense of confidence about the way in which AUKUS is proceeding."

"AUKUS is on track and we are meeting all the timelines that are associated with it," he said. "We are very optimistic."

Hegseth’s address to the defense forum made multiple mentions of cooperation with Australia but no reference to AUKUS, however, though he did later mention the deal when he was taking questions.

Hegseth did urge allies in the Indo-Pacific to increase their defense spending, and underscored the need for a "strong, resolute and capable network of allies and partners" as the U.S. seeks to counter China.