As the United States approaches the 250th anniversary of its Declaration of Independence, Australians could be forgiven for skipping the celebration. The administration in Washington has bullied its allies, tariffed its friends, and conducted a war that has thrown the global economic and energy systems into disarray. But the temptation to read this moment as a reason for Australian independence gets the lesson exactly backwards. For Australia, America’s semi-quincentennial should be less a celebration of independence than a reminder of interdependence. Properly managed, that interdependence is how Australia builds resilience in the face of global shocks.
The inequities of the US-Australia relationship are real, but they are not new. Australia has always had to accept the good with the bad in the US alliance. As much as it is built on shared belief in “life, liberty, and the pursuit of happiness,” the alliance is also heavily shaped by Australia’s position as a far-away island in need of protection, investment, technology and energy. Energy security, in particular, has long been the quiet nervous system of Australian strategy.
Historical lessons and echoes
The global oil shocks of the 1970s helped create the International Energy Agency, whose core purpose was to prevent oil-importing democracies from being held hostage by supply disruption. Australia joined the IEA in 1979, at a time when Bass Strait oil and gas made the country more secure than it is today. Australia was then a net oil exporter and exempt from the IEA’s 90-day stockholding obligation. But as domestic oil production peaked, refineries closed and imports of refined fuels rose, Australia became non-compliant with that obligation in 2012 and only just announced that it would establish its own reserve once again in the latest federal budget. A 2020 deal allowing Australia to lease space in the US Strategic Petroleum Reserve reinforced how Australian fuel security depended on allied infrastructure, only to then remind us how exposed we are to global shocks when the holdings were sold in 2022 in response to Russia’s war in Ukraine.
Now, another oil shock has exposed that dependence all too vividly. America, our closest ally and defence guarantor, once again went to war in the Middle East with no consultation from allies or consideration of its economic impact on their citizens. Australia, which imports 79% of its refined petroleum products, now faces higher petrol prices, significant supply uncertainty and a deteriorating macroeconomic environment.
Yet the same crisis also reveals why walking away from the American system is no answer. The global oil market, the IEA emergency response system, freedom of navigation and the financial capacity to stabilise supply chains all still depend heavily on US power, even when US power is part of the problem.
The energy transition does not remove this dilemma. It changes its geography. As consumers increasingly turn to electric vehicles (EVs) and solar power, Australia risks trading dependence on Middle Eastern oil for dependence on Chinese supply chains. China is the dominant investor, manufacturer and exporter of almost every supply chain segment in battery, solar and EVs. It is also the leading refiner for 19 of 20 strategic minerals tracked by the IEA, with an average market share of around 70%. Furthermore, since it first threatened Japanese access to rare earths in 2010, Beijing has shown an all-too-familiar willingness to weaponise trade when it needs to make a political point or coerce a particular outcome.
The ongoing push-me-pull-you between America and China is a familiar refrain for Australian policymakers, and Trump’s latest blunder has further soured the public on the relationship. The US Studies Centre’s own polling released this week shows the share of Australians who think the US alliance makes Australia less secure jumped from 11% in 2023 to 28% in 2026. Recent polling from the Australia Institute in May found that 59% of respondents thought Australia’s interests were better served by a more independent foreign policy than through the alliance.
This, however, is a false choice — independence simply isn’t an option for a country of Australia’s size and economic makeup. Australia, one shouldn’t forget, has a comparable population and economic output to Texas; a large state, yes, but still just one of 50 states in the union. Perhaps more importantly, Australia is a “houses and holes” economy reliant on two volatile industries — real estate and mining — with among the lowest ‘complexity’ levels in the developed world. Australia simply cannot independently secure its fuel supply or build minerals processing at scale on its own. Instead, it is reliant on foreign markets for its commodities; foreign investment for its financing; foreign energy for its production; and foreign technology for its productivity.
Further, as much as Australia 'punches above its own weight' in global diplomacy, Trump’s unravelling of the ‘rules-based international order’ has displayed just how reliant this order was on the underwriting of a superpower to begin with.
What is a highly dependent middle power to do?
Foreign Minister Penny Wong calls our time an era of “amplified middle power diplomacy,” in which countries like Australia build coalitions to defend their interests when no single power will uphold the rules. Mark Carney has made a similar case from Canada, calling for a system of “variable geometry” where shifting coalitions are created around shared interests in trade, defence, critical minerals, artificial intelligence and energy security. In this view, middle powers are not merely hedging between America and China; they are rescuing their own agency.
But the “middle-power moment” risks becoming a “middle-power delusion.” Just because countries like Australia and Canada are more visible does not make them more powerful; it may simply mean they are more exposed. The conditions that once allowed middle powers to flourish — American security protection, expanding globalisation, open markets and the ability to trade with rivals without choosing among them — are eroding. Issue-based coalitions and national self-reliance cannot wish away three hard facts: the dollar still dominates finance, China still controls clean-energy manufacturing and most of the Global South sits outside the West's strategic imagination.
For Australia, the lesson is bracing: autonomy is not achieved by declaring it, and coalitions are not strategy unless they are backed by resources, industrial capacity and hard choices about alignment. Australia’s own actions reveal it knows this.
Hard work begins at home
The recent federal budget shows how difficult that hard work will be. The Australian Government announced a A$1.3 billion cut to the A$22.7 billion Future Made in Australia initiative — the country’s premier reindustrialisation effort — in favour of short-term affordability measures. This includes cuts from the Battery Breakthrough Initiative, Solar Sunshot and Hydrogen Headstart. Of course, not that every hydrogen, solar or battery dollar should be defended and indeed, well-designed industrial policy should be responsive to a changing environment. But cutting long-horizon programs precisely because they are difficult risks repeating Australia’s old pattern: exporting rocks and importing the complex products, finance and technologies that underpin our vulnerability.
Addressing these vulnerabilities would mean being more selective, not more timid. It should mean choosing a few parts of the energy system where Australia can plausibly become indispensable — critical minerals processing, battery materials, green metals, low-carbon fuels, grid equipment, project engineering — and matching the policy tool to the investment bottleneck. Future Made in Australia is a positive step in that direction but still lacks the targeted ambition to convert Australian endowments into productive firms, useful jobs and supply-chain leverage with partners. If Australia wants to rely less on a capricious America and avoid deeper dependence on China, this is the slow work it cannot keep postponing.
Diplomatic pathways
Meanwhile, the latest Quad foreign ministers' meeting showed how its recent energy security and critical minerals focus is a better model of capacity-building than vague calls for strategic autonomy. Its new Indo-Pacific Energy Security Initiative will identify areas of cooperation in technology, management, policy, international market analysis and emergency response exercises, and will convene a Quad Fuel Security Forum. Its Critical Minerals Initiative aims to mobilise up to $20 billion in government and private support for mining, processing and recycling. This is what it will look like to bolster energy security by building shared industrial capacity. Australian resources and geography, Japanese capital and industrial capability, Indian scale and strategic location, and American finance, technology and military reach.
The same logic applies bilaterally. While neither side is likely to refer to its climate provisions these days, the 2023 Australia-US Climate, Critical Minerals and Clean Energy Transformation Compact made energy a central pillar of the alliance, including cooperation on clean energy supply chains, critical minerals and battery technologies. The 2025 US-Australia critical minerals framework went further, linking stockpiling, processing, offtake arrangements, price mechanisms and rapid-response planning. These efforts are not a substitute for Australian capability, but they are a way to specialise in areas of Australian strength, complemented by targeted partnerships.
Dose of realism
None of this is a counsel of despair. It is a plea for realism in a debate too often driven by the latest Trump headline or a new wave of ‘cultural cringe'. The US alliance is here to stay, and Australia has a real role within it as thought partner, commodity supplier and advocate for shared values. That role includes speaking plainly when we disagree. But candour serves a stronger partnership; it is not a down payment on some new order Australia lacks the means to build.
Realism also implies taking the long view of history, especially at a time of 250-year anniversaries. One should not forget, as former Chief Justice Michael Kirby famously observed: without the American Revolution, Britain may have never sought to establish New South Wales as a colony in the first place. Indeed, Australians’ very capacity to question its loyalties and contemplate exerting strategic autonomy can be directly traced back to those early Americans’ calls to “[l]et every man speak his mind;” as revolutionary as any form of government at the time.
The Declaration of Independence was not simply a rejection of dependence. It was an argument for agency: the right of a people to judge their interests and build the institutions needed to defend them. For Australia, the equivalent task is not to declare independence from America, it is to make that interdependence less brittle and continue to serve our interests. The goal is not a fantasy of energy independence, nor passive dependence on the United States, but a more resilient Australia in a more equal alliance, striving to form that 'more perfect union' between our two nations.
