US, Australia sign agreement as Trump confirms submarine deal

Trump also reaffirmed that Australia will receive its long-promised nuclear-powered submarines, a key element of the trilateral AUKUS pact with the United Kingdom. The discussions focused on defense technology and critical minerals — two areas central to countering China’s growing regional influence.

Boosting rare earths production

Albanese announced that the deal would trigger $8.5 billion in critical minerals projects across Australia, describing it as a step that would elevate bilateral relations “to the next level.”

Australia, one of the world’s top five producers of lithium, cobalt, and manganese, aims to reduce China’s control over global rare earth supplies — essential components for semiconductors, electric vehicles, wind turbines, and defense equipment.

While China dominates the refining and processing of these elements, analysts say Australia offers a reliable alternative source, even if on a smaller scale. Both governments pledged to invest over $1 billion each within six months, while the White House placed the combined figure at $3 billion.

Renewed Momentum for AUKUS

Albanese also pushed for progress on the 2021 AUKUS submarine agreement, which had stalled under review by the Trump administration earlier this year. Trump confirmed that construction of at least three Virginia-class nuclear submarines for Australia was “moving along rapidly.”

“The submarines we’re building for Australia are already in progress,” Trump said. “We’ve worked on this long and hard, and it’s moving very well.”

The AUKUS pact, worth up to US$235 billion over 30 years, will eventually allow Australia to develop its own fleet of nuclear-powered vessels, enhancing its long-range maritime capabilities in the Pacific.

Diplomatic tensions and political drama

The AUKUS deal previously caused a diplomatic rift with France, after Australia scrapped a multi-billion-dollar contract for diesel-powered submarines from Paris.

During the White House meeting, Trump had an awkward exchange with Australia’s ambassador to Washington, Kevin Rudd, a former prime minister who had criticized Trump online before deleting the posts.

“I don’t like you either — and probably never will,” Trump told Rudd, drawing laughter in the room.

China’s shadow over the talks

China’s expanding power in the Indo-Pacific loomed over both the defense and minerals discussions. Australia positions itself as a key US ally in deterring Beijing’s assertiveness across Taiwan and the South China Sea.

Canberra announced plans for a strategic reserve of critical minerals for allies like the United States, to ease dependence on Chinese processing networks. Meanwhile, Trump accused China of using export restrictions to manipulate trade, warning of 100-percent tariffs in retaliation.