All Things Policy Canberra’s Choice? Between Alliance and Autonomy
Aug 20, 2025
In this engaging discussion, Peter Varghese, former Australian Foreign Secretary and Chancellor of the University of Queensland, shares insights on Australia's balancing act between its long-standing alliance with the U.S. and economic ties with China. He delves into the strategic implications of the AUKUS pact and the evolving Australia-China relationship under Prime Minister Albanese. Varghese also addresses how Australia navigates the complexities of trade and security amid shifting global dynamics, emphasizing the importance of a pragmatic approach to national interests.
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Dual Economic Anchors
- Australia values a strong economic and investment relationship with the United States alongside deep trade ties to China.
- Tariffs on Australian products worry Canberra mainly for their precedent-setting damage to the international trading system.
Unclear Stakes In Any US–China Deal
- A US–China trade deal could stabilise global trade but effects depend entirely on the details.
- Such a deal might advantage US access to China and risk disadvantaging other partners like Australia.
AUKUS Raises Strategic Trade-Offs
- Varghese questions AUKUS's strategic rationale and its huge opportunity cost for Australia.
- He warns AUKUS may push Australia toward forward defense rather than continental self-defence planning.