Australia ripped up a massive French submarine contract to join a landmark pact with the US and UK.
Now that choice looks alarmingly fragile.
The AUKUS security pact was meant to drag Australia into the nuclear-submarine age and anchor Western power in the Indo-Pacific. Today, under mounting pressure in Washington and rising tension over Taiwan, that promise is under review – raising a stark question: could Canberra actually end up with no new submarines at all?
How Australia walked away from “the contract of the century”
Back in 2016, Australia struck what Paris called “the contract of the century”. The plan was straightforward on paper. France’s Naval Group would build 12 conventionally powered attack submarines, based on the French Suffren-class but adapted for Australian needs. The price tag: around €56 billion, with deliveries expected from the early 2030s.
For France, it was a historic industrial and diplomatic win. For Australia, it promised a modern fleet to replace ageing Collins-class diesel-electric boats and keep pace with rapid military build-ups across Asia.
Then, in 2021, Canberra detonated the deal.
Without warning Paris, the Australian government announced it was scrapping the French contract and instead joining a new strategic partnership with the US and UK, known as AUKUS. That agreement would give Australia access to nuclear-powered submarines, vastly extending range, stealth and endurance.
A UK–US–Australia pact worth an estimated €208 billion was supposed to replace the French “contract of the century” and reshape power in the Indo-Pacific.
For France, it was a humiliation. For Australia, it looked like an upgrade: smaller in number, but far more capable submarines, backed by Washington and London.
What AUKUS actually promised Canberra
AUKUS is built around three pillars: submarines, advanced technologies, and deeper defence integration. The submarine pillar was the political showpiece.
The broad outline looks like this:
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- Early 2030s: Australia buys at least three, and possibly up to five, Virginia-class nuclear-powered attack submarines (SSNs) from the United States.
- 2030s–2040s: US and UK nuclear submarines regularly rotate through Western Australia, training Australian crews and sharing know-how.
- Early 2040s and beyond: the UK and Australia co-design and build a new generation of nuclear submarines, often dubbed SSN-AUKUS.
Across roughly three decades, the whole undertaking is projected to cost around €208 billion (well over A$300 billion). Supporters argue that such a force would give Australia the ability to patrol deep into the Indo-Pacific and complicate any Chinese military move, from the South China Sea to the Indian Ocean.
Why nuclear boats matter more than numbers
Nuclear-powered submarines are not about sheer fleet size. They are about reach, persistence and psychological impact.
| Feature | Conventional submarines | Nuclear-powered submarines |
|---|---|---|
| Range and endurance | Limited by fuel and batteries | Can stay submerged for months |
| Speed | Slower sustained speeds | High sustained underwater speed |
| Stealth profile | Must surface or snorkel regularly | Rarely needs to surface, harder to track |
| Complexity | Less complex, easier to maintain | Highly complex, major training and infrastructure burden |
For a country as geographically isolated as Australia, the nuclear option promised to close distance with potential flashpoints and tie Canberra more tightly into US war planning in Asia.
Washington’s rethink: Taiwan first, AUKUS later?
The problem is that those Virginia-class submarines are built in US shipyards that are already struggling to meet American needs. Production bottlenecks, workforce shortages and maintenance backlogs have put pressure on the US Navy’s own schedule.
At the same time, tensions over Taiwan have hardened. US planners increasingly speak openly about a potential confrontation if Beijing attempts to force reunification by military means.
In a Taiwan crisis, every US nuclear attack submarine becomes a prized asset, and the idea of exporting any of them starts to look like a luxury.
Influential voices in Washington have grown warier of binding the US to deliver scarce submarines overseas when they might be needed at home. In August 2024, former US deputy assistant secretary of defense Elbridge Colby expressed deep scepticism about the practicality of AUKUS, arguing that it would be “crazy” to have fewer submarines in the right place at the right time.
That line of thinking has gained traction on Capitol Hill. In early 2025, members of Congress suggested that Australia should not bet everything on AUKUS and ought to invest in “other military capabilities” as insurance. The message between the lines: US commitments under the pact might not be as solid as Canberra once hoped.
An alliance under quiet review
Officially, the AUKUS deal still stands. No administration wants to be blamed for weakening deterrence in the Indo-Pacific. Yet behind the scenes, US officials are reviewing whether the full package is viable under current industrial and strategic constraints.
That review includes painful questions: how many Virginia-class submarines can American yards realistically produce? How many must remain in US service to meet war plans around Taiwan and the wider region? And what happens if the numbers do not add up?
If the answer is that exports to Australia are unaffordable, politically or militarily, then Canberra faces a grim scenario: having ditched France, it may be left waiting on a promise Washington cannot keep.
Could Australia really end up with no submarines?
Australia’s current Collins-class submarines have already had life-extension upgrades, but they cannot stay in service indefinitely. The timeline was tight even with the French deal. With AUKUS, Australia accepted a deeper capability gap in exchange for a more powerful fleet later on.
If the US ultimately cancels or significantly delays Virginia-class transfers, several uncomfortable outcomes loom:
- Australia faces a capability cliff as ageing Collins boats retire faster than replacements arrive.
- Any joint UK–Australian SSN programme slips further into the 2040s or beyond, creating a long period of reduced submarine strength.
- Canberra scrambles for interim solutions, such as leasing allied submarines, expanding rotations of US and UK boats, or rushing a new conventional design.
Australia walked away from 12 French conventional submarines in search of nuclear propulsion, and now risks a future where no new fleet arrives on time.
From Beijing’s perspective, that gap could look like an opportunity. From Canberra’s vantage point, it would mark a strategic vulnerability entirely of its own making.
What options does Canberra have left?
Plan B: diversify rather than replace
Australian officials are well aware of the risks. That is why US lawmakers urged Canberra in 2025 to put money into other capabilities, not just submarines. These might include:
- Long-range anti-ship and land-attack missiles, launched from air, land or sea platforms.
- Uncrewed submarines and underwater drones to supplement crewed fleets.
- Space-based surveillance and secure communications to track naval movements across the Pacific.
- Cyber and electronic warfare tools targeting adversary ships and command networks.
None of these fully substitutes for a quiet nuclear-powered submarine prowling the deep ocean. Together, though, they could raise the cost of aggression and give Australia more flexibility if AUKUS falters.
Could the French option return from the dead?
Another theoretical scenario is a rapprochement with France. Naval Group still has the design expertise and industrial capacity to build conventional or even, in partnership, nuclear-capable designs. Politically, though, reviving that relationship at submarine level would be awkward.
Paris felt badly burned in 2021. Any new deal would require intense diplomacy, long timelines and probably higher costs than the original contract. Yet if Washington scales back its commitment, the Franco-Australian path might start to look less like a humiliation and more like a lifeline.
Key terms and risks behind the submarine headlines
Two pieces of jargon sit at the heart of this saga. “SSN” stands for nuclear-powered attack submarine. These boats use nuclear reactors for propulsion, not for carrying nuclear weapons. “AUKUS” is the defence pact linking Australia, the UK and the US, created partly to counter China’s military rise.
The biggest risk for Australia is strategic dependence. By opting out of a French-led project and tying itself tightly to US industrial capacity, Canberra has limited its own room for manoeuvre. If American priorities shift sharply toward Taiwan, Australia’s submarine plans become a lower-order concern in Washington.
There is also a domestic risk. Australian taxpayers are committed to an eye-watering bill spread over decades. If the promised submarines fail to appear, or arrive much later and in smaller numbers, public trust in defence planning could erode fast.
One scenario often discussed in defence circles imagines a mid-2030s crisis. Collins-class submarines are nearing the end of their extended lives. Virginia-class deliveries have slipped or been cancelled. China ramps up pressure against Taiwan and pushes its navy further into the Pacific. In such a case, Australia might be forced into rapid, expensive stopgap purchases, or into relying far more heavily on US and Japanese forces for its own security.
On the other hand, if Canberra uses this moment of uncertainty to broaden its toolkit – investing in missiles, drones, undersea sensors and resilient alliances – the eventual arrival of nuclear submarines, whether under AUKUS or a successor scheme, could slot into a more balanced force. The coming years will show whether Australia’s big gamble ends as a masterstroke of long-term planning, or as a cautionary tale about betting everything on one strategic promise.
Originally posted 2026-02-16 08:58:50.