By Asia Society Australia Distinguished Policy Fellow, Richard Maude

Pity the stewards of Australian foreign policy watching, hair standing on end, as the Trump administration courts autocrats, attacks allies and tosses facts and reason, like old cigarette butts, out of the careening, post-truth MAGA motorcade.

US President Donald Trump’s unpredictability and the wild “burn it all down” mood that has gripped Washington make forecasting the next few years especially difficult. But Trump appears to want a new world order that privileges strong powers, whether democratic or totalitarian. Such a world will be lonelier and more dangerous for Australia.

The task now is to consider what can be salvaged from the wreckage and, especially, what Trump means for Australia’s primary national security challenge – a nationalist, authoritarian China with the power to re-shape regional and global affairs more to its liking and less to ours.

The questions that demand answers could hardly be more consequential. Is the United States committed to a military balance of power in the Indo-Pacific that deters China from the use of force? How much more likely now is Chinese hegemony in Asia? Could Australia survive under Chinese hegemony? And does Trump’s America make war in Asia more or less likely?

An essential starting point is to recognise that the mood in America that Trump both exploits and represents, albeit in an extreme form, is here to stay. America has been tiring for some time of what it sees as mendicant partners and is no longer able or willing to write blank cheques in the name of world security. Shifts in the global balance of power make it harder for the United States to shape world affairs, even where it wants to. Globalisation is now widely regarded as a bad deal, having benefited consumers at the cost of American jobs, industry and communities.

Australian governments have not, as it happens, been oblivious to these deeper currents. Aspirations for a defence force with more strike power, efforts to shore up Australia’s influence and interests in the Pacific and South-East Asia, and closer relations with India and Japan are all partial responses both to Chinese assertiveness and a changing America. This is quietly hedging our bets, even if Australian governments won’t use that term.

Still, there has been just enough continuity in US approaches to China for successive Australian governments to aspire to a favourable balance of power in the Indo-Pacific, or what the Albanese government calls a “strategic equilibrium”. The goal is a region in which “no country dominates and no country is dominated”. This does not mean isolating Beijing, but it does require balancing and, where necessary, constraining China’s power, especially its coercive military power.

Contrary to occasional claims to the contrary, this strategy is not premised on the United States remaining the most economically and militarily powerful country in Asia – that is, in holding on to what policymakers sometimes call “primacy”, an era that is judged to have already passed.

But the idea of strategic equilibrium does assume reasonably consistent levels of US political and economic leadership in Asia and, especially, a US-led effort to build the fabric of military deterrence across the Indo-Pacific. US military over-match of China, or at least of a rough parity, is seen as the best way of keeping the peace and cautioning China on the use of military power, including over Taiwan.

America in Asia. Or not

Does Trump’s victory, coming after a long period of patchy US commitment to Asia, put the goal of a “strategic equilibrium” out of reach? Peter Varghese, the former secretary of the Department of Foreign Affairs and Trade, is right to say this question must be confronted, as reluctant as governments and officials might be to do so.

It is easy to dismiss Trump as “unserious” on strategic policy given his mercurial nature, tenuous grasp of global realities and obsession with his media profile. To do so misses consistent, deeply held instincts. Vindicated and unconstrained, Trump’s second presidency represents a truer version of his foreign policy self.

Trump repudiates the core proposition of decades of US grand strategy – that America will do better in a world that is, as much as possible, more orderly and more democratic than the hard years between 1914 and 1945. For Trump, strength comes instead from an unapologetic and ruthless pursuit of narrow US interests – strong countries inevitably will do what they will, and trying to shape global order has made the United States weaker and poorer. This suits the MAGA far right, which wants to demolish not just the US administrative state but the fabric of American empire and worries only that Trump won’t go far enough in burning down the old order.

There has been speculation of a G2 world or a return to spheres of influence with the United States, China and Russia the key poles. Trump treats the leaders of those countries as peers, even Putin, much to the dismay of allies and friends. He wants a grand “deal” with Beijing. The new US Secretary of State, Marco Rubio, once a hard-liner on China and Russia, has fallen into line, albeit while looking increasingly miserable. Rubio says that a world of multiple poles must be accepted – “it is not normal for the world simply to have a unipolar power”.

None of this suggests Trump is remotely interested in contesting primacy in Asia. Indeed, if Trump approaches Asia as he has NATO and Ukraine, he will want Pacific allies to bear more of the burden of maintaining security and will be sceptical about the United States underwriting peace. The Pacific Ocean would be less a sphere of US influence and more a protective moat for the homeland. Trump’s instincts will be to avoid conflict over Taiwan at almost any cost. He probably would not see US security and prosperity as fundamentally challenged by Chinese dominance over Asia.

There are countervailing forces, although these look much weaker today than they were in Trump’s first term. Most Republicans in Congress, and some in Trump’s national security team, push a hard line on China, even if few have had the courage to challenge Trump to date.

China’s ambitions and interests inevitably clash with those of the United States. This dynamic will drive competition and pushback by the United States against harmful Chinese behaviours. A trade deal that sticks will be hard to deliver, a grand deal encompassing security issues even harder. The administration’s relative restraint on China to date could shift quickly to overt, tense contestation.

A true Trump revolution would gut alliance relations of any true meaning and leave China for the rest of us to worry about. Another possible outcome is uncertainty and dissonance – approaches that both undercut and support alliance relations and deterrence.

Trump and his team talk of “peace through strength”, for example. If it can find the money, the administration likely will look to increase investment in America’s defence industrial base and to try to narrow the gap between the scale of the Chinese military and that of the United States.

After it has finished humiliating its European allies, the administration might eventually come back to the idea of a military balance of power in the Indo-Pacific and the importance of allies like Australia to this effort. And Washington will keep trying to constrain China’s development of technologies critical to war fighting and to broader advanced industrial applications.

China as top dog

In Australia, those commentators who argue that American primacy in Asia, or at least American leadership, is essential to Australia’s security fear that in its absence the region will succumb to Chinese hegemony.

Based on what China’s leaders say and do, we can reasonably conclude that China aspires to a large sphere of influence around its borders in which it feels secure and countries defer to its interests and authority, either automatically or by coercion. This is seen as a reasonable expectation for a great power.

For Xi and the Communist Party, China’s self-defined “sovereignty,” including over the South China Sea and Taiwan, is a non-negotiable component of “national rejuvenation”.

Beijing would prefer the US security presence in Asia to be withdrawn or at least pushed further away from China. It sees US alliances as a relic of the Cold War and wants these to atrophy, with alliance partners charting their own “independent” (i.e. more favourable to China) course. More broadly, China wants to weaken Western, especially US, influence in the international system and to diminish what is left of its liberal characteristics. It may be happy now simply to leave this task to Trump.

In a turbulent world, economic security is as important to Xi and the Party as other forms of security. China pursues policies to make itself less reliant on the world, and especially less reliant on the United States, and the world more dependent on it for industrial products and advanced technologies. This “beggar they neighbour” approach creates ever greater global trade imbalances and drives economic nationalism in the US and Europe.

Xi believes that to achieve these objectives, China must focus single-mindedly on building the wealth and hard power necessary to encourage or force compliance with China’s interests. Xi believes time is on China’s side (“the East is rising and the West is declining”, as the Party likes to say) and, while not ruling out the use of force, would prefer to achieve his strategic objectives peacefully.

For Australia, an autocratic, hegemonic China could mean, among other things, higher expectations of compliance with China’s interests and greater risk of coercion. China might feel even freer to interfere in Australia’s politics and society. The CCP’s anxious extraterritorial pursuit of ideological security demands support China’s version of the truth on all issues important to its interests.

Beijing could demand privileged access to Australian resources, markets and infrastructure. Economic ties could be held to ransom more regularly.

China could gain complete control of the South China Sea, with the power over trade. China might be more willing to use force to achieve unification with Taiwan, especially if it judges the United States will abandon Taiwan as it has Ukraine.

If China were to take Taiwan by force, the blow to American prestige would be immense. China would have free rein inside the first island chain. Japan and South Korea might feel compelled to become nuclear weapon states. Conversely, the defeat by the US and its allies, and Taiwan, of an attempted invasion would create an angry and humiliated China and a long new Cold War. The blow to the Australian economy and our standard of living would be immense.

Chinese hegemony would mean diminished Australian influence in South-East Asia and even more contest in the Pacific. Regional bodies like the East Asia Summit would fall further into functional irrelevance. China could develop a veto power over the foreign and defence policies of some of Australia’s most important neighbours, including Indonesia. This veto could extend to important bilateral co-operation between Australia and its regional partners.

A less aggressive, less zero-sum approach to the way China pursues wealth and security would ease some of these pressures but seems unlikely given the nature of the Chinese state under CCP rule. Even so, as difficult as it might be, it would be a mistake for Australian policymakers to assume that Australia could not adapt and survive.

How bad could it be?

A military threat to Australian territory would be unlikely in all scenarios save a war over Taiwan. It is right to worry about rising Chinese nationalism and militarism but, at least for now, there is no evidence to support parallels with the sweeping ambitions for territorial conquest and control of Nazi Germany and Imperial Japan.

More insidious threats to Australia’s sovereignty are not beyond our ability to manage. Despite occasional claims to the contrary, China does not threaten our way of life. This exaggerates what China can achieve covertly inside Australia and underplays our ability to defend Australia’s democracy and society.

The nation’s economy has proved it can weather punishment. The constant threat of disruption to economic ties might force the kind of diversification that, for most industries, is already possible, even if at a lower price point. Where there are major exceptions, like iron ore, Australia sustains its own leverage, at least for now.

There could also be more space under Chinese hegemony than might seem possible at first glance. The United States succeeded as what Joseph Nye once described as a partial hegemon for so long partly because it was able to persuade many countries that it was in their interests to come along for the ride. As much as anything, the appeal was about the type of world the United States wanted to build, flawed as that enterprise inevitably was.

China lacks any equally compelling vision, for all the attempts to craft one through signature Xi Jinping offerings like the global security and global development initiatives. A hegemonic China pursuing zero-sum will inevitably generate pushback and opportunities for countries like Australia, Japan, South Korea and India to work together. Nor will China ever be as geographically secure as the United States. It has many neighbours and nearly as many fractious relations to juggle.

What then shall we do?

Four long years of Trump, and the aftershocks that will follow will require Australia to rethink or re-gear elements of its foreign and defence policy and make more determined investments in national resilience. This must be first order business when the dust settles on the federal election. The work won’t be easy. As the late Allan Gyngell wrote in Fear of Abandonment, his classic history of Australia in the world, foreign policy requires vision and hard work. He might have added strong leadership and deep pockets.

Australian policymakers have favoured pursuing a balance of power favourable to our interests in the Indo-Pacific, as ambitious as that objective is because good alternatives are in short supply.

It is not in Australia’s DNA to submit meekly to Chinese coercion.

China’s power and Asia’s heterogeneity mean security in or with Asia is difficult to achieve absent the United States – precisely the problem with which President Volodymyr Zelensky and European leaders now wrestle desperately.

The nation is not psychologically or technologically ready for an indigenous nuclear deterrent capability, a move that would likely also rupture some relations in the Pacific and South-East Asia and that could drive proliferation.

And we should spare ourselves vapid talk of a more “independent” foreign policy if that means walking away from the Alliance. It remains in the national interest to work pragmatically with the Trump government, to find alignments where we can while standing up strongly for the things we believe in, and to protect military and intelligence co-operation.

Even so, Australia may have to give up on the idea of a strategic equilibrium in which both the United States and our Asian neighbours are invested and settle for something messier and less grand. This could include accepting that US influence in Asia will inevitably fade further while continuing to scrap away at the narrower goal of encouraging US-led military deterrence of China, something that at least some in the Trump administration say they want.

This would still be a gamble, requiring not just US investment in military over-match but enough practical and rhetorical commitment to convince China not to test America’s will to fight. The task of building a defence force that has more deterrent capability is therefore more urgent than ever. We look exposed now but will be well and truly caught short if even a military balance of power in the region becomes out of reach.

Current defence spending looks wholly inadequate to the ambition of the 2023 Defence Strategic Review and 2024 National Defence Strategy. Critics of calls to increase funding reasonably ask where the money will come from. If ever there was a moment to make the case to the public that Australia’s defence is underfunded, surely it is now. This is an opportunity for the major political parties to put the national interest first and find bipartisan solutions to Australia’s structural deficits, including reform of the tax system. Having our leaders talk honestly, clearly and calmly to the public about the dismal state of the world would be a good start.

Gerard Baker wrote recently in the Wall Street Journal that Trump’s new world order will drive geopolitical and economic realignments. If the Quad stalls, Australia risks becoming a lonely middle power with no natural regional grouping other than the Pacific Islands Forum. The East Asia Summit process is moribund and Australia would be a poor fit in ASEAN, even if we were wanted.

The government’s recent “Australia in the World” foreign policy document points in the right direction, identifying the need for “more diversified relationships” across the board. In short, more hedging. This must be a bipartisan goal, and a creative, energetic and well-funded one, with no cuts to the aid budget or diplomatic capability.

Sustaining a working relationship with China, even one with tightly bounded space for co-operation and many fracture points, will remain another entirely reasonable hedge in the national interest.

Even in a power-based world, Australia can continue to support international law. There may be opportunities to work in small groups to support rules that are most important to Australia, like those embedded in our trade agreements.

Australia needs a comprehensive strategy for dealing with a world of rising economic nationalism. If one exists, beyond heroically optimistic talk of a “stable and open global trading system”, it is not evident.

Finally, a clearer understanding of what national resilience and economic sovereignty look like in the current era and what realistically can be funded in difficult budgetary circumstances would help guide future policy and investment by governments and businesses. This requires a national discussion led by the federal government and should also be a priority after the election.

This article originally appeared in The Australian Financial Review.