When US Defence Secretary James Mattis made his first trip to Asia last February, regional allies and partners were cautiously relieved. Donald Trump had spent months condemning Japan and South Korea as free-riders, and had just nixed the Trans-Pacific Partnership and hung up on Malcolm Turnbull. So it felt good to have the retired general say all the right things about Washington's enduring commitments.
"It's a reassurance message," explained one administration official, for those who feared Trump "was somehow going to retreat from our traditional leadership role in the region".
But Trump is unpicking America's position in Asia. And there's not much that Mattis or the remaining "adults in the room" can do about it. So far this year the President has imposed punitive tariffs on Asian allies and partners, legitimised Kim Jong-un's despotic regime without securing any denuclearisation goals, failed to consult allies before cancelling joint military exercises in north-east Asia, and started a trade war that will harm the entire region.
This assault on America's leadership role in the Indo-Pacific couldn't come at a worse time for Australia and its regional partners. As power is shifting from the US to China, Canberra's preferred mode for regional order – the maintenance of an American "security umbrella" – is no longer realistic.
Middle powers like Australia and Japan are thus struggling to advance an Indo-Pacific strategy in which like-minded nations take on greater responsibilities for helping the US maintain a "balance of power" vis-a-vis China. But while America's national security establishment is on board with this strategy, Trump's wrecking ball approach to the region is making an Indo-Pacific balance harder to achieve.
America's Asian order
Since its victory over Japan in 1945, the United States has presided over a regional order that – for the most part – has facilitated stability and prosperity in Asia. Founded on American military primacy, this hierarchal order has been organised around: a system of bilateral "hub and spoke" alliances with Japan, South Korea, Australia, the Philippines and others; support for open markets and free trade; and the preservation of international rules.
This order has worked because of a mutually beneficial transaction. The US has offered the region security guarantees and access to its lucrative markets, in return for hosting forward military bases and supporting its superpower position. And as America's presence has been governed by treaties and supportive of international rules like the UN Charter and Law of the Sea, Washington has been regarded by most as a predictable and largely benign hegemon.
While the US-led order hasn't been cheap to maintain, successive administrations have seen it as a strategic asset worth paying for. The US currently spends $US700 billion ($950 billion) a year to sustain its global military and base infrastructure, a significant portion of which goes to the 85,000+ troops stationed in east Asia. Although there are frequent arguments about allied cost-sharing and host agreements, these have always been carefully managed by Washington to preserve allies' confidence in US treaty commitments.
Likewise on trade. As Princeton University's John Ikenberry observes: "The export-oriented development strategies of Japan and other Asian 'tigers' depended on America's willingness to accept imports and huge trade deficits, which alliance ties made politically tolerable."
To be sure, from the late-1960s until today rising deficits have caused serious fights between the US and its north-east Asian allies. But the importance of projecting power into Asia has led every American president to quarantine trade disputes from harming alliance relations.
Enter Donald Trump
Until now. Trump, who doesn't care about notions of "regional order", is trying to reverse the deal America has upheld with its Asian partners since the 1950s. He's not only mocked Asian alliances as bad deals for America and spoken eagerly about withdrawing forward-deployed troops. But he's repeatedly hinted that US protection might be contingent on a reduction of trade deficits or increase in other allied payments.
In contrast to all of his predecessors, Trump is motivated by a hyper-transactional instinct to extract a higher price for America's ongoing participation in the regional order it constructed. This means: No open trade unless the US exports more, no blanket security guarantees unless allies do more, no uptick in foreign assistance and no more diplomatic arrangements that curb America's freedom to cut unilateral deals.
While dealing with Trump's "America First" approach to Asia would have always been hard, it comes at a particularly uncertain time for the regional order.
Strategists in Australia and other Asian nations have begun – quite independently of Trump – to question the United States' ability to sustain its traditional leadership role. Since the early 1960s, America's share of world economic output has fallen from about 40 per cent to just 20 per cent, chipping away at the hard power foundations of the US-led order. America's relative military edge is now being contested by China and its economy will only be half as big as the Asian giant's by 2030 in purchasing power terms.
China, by contrast, is posing an increasingly assertive and illiberal challenge to America's position. It's seeking to establish its own sphere of influence through military expansion in the east and South China Seas, and via sprawling geo-economic strategies like Xi Jinping's Belt and Road Initiative.
While its economic trajectory may run into difficulties, Beijing is growing ever more confident about building its own instruments of regional order – banks, infrastructure webs and military outposts – and manufacturing regional compliance through covert political interference.
These power dynamics, along with America's war-weary public and ongoing commitments in the Middle East and Europe, suggest that Washington can no longer afford to be the sole provider of security in Asia.
Faced with these twin dilemmas, Indo-Pacific nations are looking for ways to enhance their security – both independently and collectively – and offset their economic dependence on China. Almost all would prefer the light-touch of US hegemony to China's Faustian offer of economic prosperity in return for political and strategic obeisance. But this may no longer be on the table.
Accordingly, officials in Australia, Japan and the US – and to a lesser extent in India – are working on an Indo-Pacific strategy to improve the odds that the region will remain free and open in the absence of sustained American primacy.
The logic of this strategy is one of collective security. As Australia's Foreign Policy White Paper makes clear: because China is challenging America's regional position, and because Washington is unlikely to be able or willing to respond effectively alone, democracies like India, Japan, Australia, South Korea and Indonesia must come together to offset Chinese influence and help the US maintain "a regional balance favourable to our interests".
This is a tall order. To be successful, the region's most capable middle powers – especially Japan, Australia and India – must work with America to foster confidence among smaller nations that there are viable ways to hedge against Chinese power. This means strengthening regional security contributions and offering alternatives to Beijing's geo-economic designs.
On the security front, the much-hyped Quadrilateral Security Dialogue is an important step towards what some officials have called a "quasi-alliance" between these four Indo-Pacific players – albeit one that faces severe obstacles to implementation. More promising is the growing security cooperation between Australia-US-Japan and Japan-US-India, designed to send the signal that regional democracies are building the means to collectively deter and, if necessary, resist Chinese aggression.
Canberra and Tokyo are also leading the way in "security networking" by expanding defence partnerships with ASEAN militaries in a bid to foster regional capacity, interoperability and a shared strategic outlook among like-minded US allies and partners. This has included regular training exercises, the provision of patrol vessels to Vietnam, the Philippines and Malaysia, and targeted arrangements like the 2018 Australia-Indonesia Maritime Capacity Building Initiative. India's budding "Act East" engagement of south and south-east Asian militaries works in similar ways.
By complementing American security assistance, these efforts seek to reduce the burden on Washington as a security provider and demonstrate to south-east Asian nations that they can count on multiple avenues of support. As all three middle powers are also strengthening their own defence forces through major capability acquisitions – like Australia's recent purchases of new submarines, surface ships, advanced fighters and surveillance drones – the collective value proposition is improving.
Alternatives to the Belt and Road
On the geo-economic front, providing alternatives to China's Belt and Road Initiative is a more difficult task, particularly for Western market economies that can't easily leverage private firms for national strategic objectives. Indeed, Beijing's plan to spend trillions of state-led dollars on regional infrastructure is, in the absence of other options, attractive to many south-east Asian nations, who are looking for a whopping $US1.7 trillion annually for ports, roads, railways, energy grids and telecommunications networks.
Early efforts by Quad countries are now under way to support high-quality investments that – unlike many Chinese projects – won't saddle recipients with unsustainable debt or leave them with unprofitable, environmentally destructive or white elephant projects. Japan, for instance, has spearheaded these efforts with a $US200 billion "Partnership for Quality Infrastructure" that is explicitly designed to provide Indo-Pacific nations with sustainable, transparent and well-governed investment.
While Australia and the US don't have big public infrastructure funds – and have unhelpfully cut aid budgets in recent years – officials in both countries are working to mobilise greater private-sector investment in regional infrastructure. This includes new partnerships with multilateral development banks, reform of development financing institutions and programs like the ASEAN-Australia Infrastructure Cooperation Initiative.
Instead of championing these strategic and geo-economic efforts, Trump's disregard for the US-led order is undermining America's position across the Indo-Pacific.
This is particularly worrisome in south-east Asia. Trump's desire to cut foreign assistance and "prioritise the security and wellbeing of Americans" has forced Congress to reduce the State Department's international affairs budget by $US2.1 billion this year. While cuts would have been far more severe if Congress hadn't fought back, they've already driven sharp decreases in foreign military assistance to Indo-Pacific nations at precisely the time officials are trying to strengthen the region in its struggle with China.
Early signs suggest further cuts in next year's budget, including a halving of the Pentagon's $US100 million south-east Asian Maritime Security Initiative, its flagship program for bolstering regional militaries, and another $US30 million reduction in the State Department's military assistance to Asia.
Worse, not only has Trump dashed hopes of major geo-economic alternatives by rejecting the Trans-Pacific Partnership and not lifting development spending. But his tariffs and quotas will hurt many regional nations twice – directly through US-bound metals and commodity exports, and indirectly via US tariffs on China, which are forecast to reduce Chinese demand for semi-finished products made in places like Vietnam, Malaysia and South Korea.
All of this is rocking the confidence of key US allies with whom Washington must work to deliver a successful Indo-Pacific strategy.
Tokyo and Seoul are still reeling from Trump's moves to ratchet up bilateral trade pressure while simultaneously scaling back US military exercises – and potentially troop numbers – on the Korean Peninsula. Indeed, Japanese officials are so worried about Trump's volatile stance on military posture, tariffs and the sincerity of his efforts to halt North Korea's nuclear program that Republican elder statesman Richard Armitage has convened a high-level review of the alliance to rekindle a sense of its strategic importance in Washington.
While Australia has been largely immune from Trump's direct swings, Asia watchers are deeply concerned about the long-term damage he's doing to America's value proposition as a committed benefactor of the regional order.
Not only is the President's hostility towards America's traditional leadership role threatening to decouple the US from its friends on trade and security. But the friction it's causing among trusted allies is a dangerous distraction from the policy conversation that US allies should be having with the White House about nurturing a free and open Indo-Pacific that will serve as a viable counterweight to China's illiberal vision.
This destructive attitude to the regional order won't necessarily last. Although Trump and his inner circle aren't changing their tune, Congress and the US national security bureaucracy broadly support efforts to craft an Indo-Pacific strategy. Indeed, this is a key element of the "strategic competition" with China that Pentagon leaders have enshrined in official policy.
Explaining this approach at the Shangri La Dialogue in June, Mattis optimistically declared that America's Indo-Pacific strategy would make "significant security, economic and development investments" in Asia. Key congressional Republicans have echoed these views and sponsored bills like the $US7.5 billion Asia Reassurance Initiative that, if passed, would put additional resources behind this agenda.
But it's far from clear how successful these efforts will be amidst White House pressure to pare back support for the US-led regional order.
Mattis, who once had Trump's ear on these issues, is being sidelined on major decisions like Trump's cancellation of military exercises with South Korea. Other administration supporters of Indo-Pacific strategy – like the National Security Council's lead Asia-hand Matt Pottinger and Assistant Secretary of Defence Randy Schriver – are being pulled away from regional strategy to focus on North Korea.
And while Congress controls the budget purse strings, political calculations around deficit reduction and placating Trump's base ahead of the midterms will place limits on how far Republicans can go in pursuing a status quo foreign policy.
All of this makes Australia's Indo-Pacific strategy more urgent. In the face of unpredictable US policy and China's mounting power and influence, Canberra must expand its strategic options by bolstering security and economic linkages with Indo-Pacific nations in the same predicament.
Diversifying our strategic relationships, and doing our bit to knit together the preferences and capabilities of like-minded countries, may help to lower the threshold for sustained US engagement as relative power shifts. But convincing Trump to fully commit American resources to defending an Indo-Pacific order remains a fraught diplomatic task.