The White House’s Trade Policy Alienates Australia and New Zealand

Australia and—to a lesser extent—New Zealand are central to U.S. defense strategy in the Western Pacific. America’s strategy, which has remained consistent through the Biden and Trump administration, aims to deter China’s expanding reach farther into the airspace and waters of the Pacific. U.S. strategy relies on building a network of partners in the Western Pacific that allow operational access, possess sophisticated weapons and, in the event of a conflict, are sites the Pentagon can count on to help deploy U.S. planes, ships, or ground forces.

Joining U.S. battles is not new for Australia which, along with Japan, is the most important of these defense partners in the Westen Pacific. Since World War I, Australia has fought alongside the United States in every war America entered.  

Now, however, the U.S. administration’s trade policy toward these two normally stalwart allies puts these defense ties at risk, as both Canberra and Wellington openly consider foreign policy shifts away from dependence on Washington.  

In addition to trade’s economic impacts, trade policy is threatening other key aspects of U.S.-Australia and U.S.-New Zealand relations: high-level intelligence sharing; strong support among policymakers and the general publics for ties to the U.S. and for a rules-based global order led by the United States; and joint efforts to prevent Chinese influence from proliferating within democracies as well as in critical Pacific island states. For more on how the White House’s trade policy is having severe geopolitical impacts on even close allies like Australia and New Zealand, see my new article for CFR’s RealEcon here.