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U.S., China both make it more difficult for nations to split economic ties with security partnership

U.S., China both make it more difficult for nations to split economic ties with security partnership

CNBC14-07-2025
Evan Feigenbaum from Carnegie Endowment for International Peace says the Australians are a bit rattled that the U.S. is pressuring Australia to increase its defense spending, but it is also hinting that the AUKUS deal might not go ahead as planned.
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‘Minilateralism' challenges the old multilateral system
‘Minilateralism' challenges the old multilateral system

The Hill

time3 hours ago

  • The Hill

‘Minilateralism' challenges the old multilateral system

The international order is evolving quickly, with new cooperation mechanisms replacing inferior multilateral frameworks. One major trend has been the 'minilateralization' of multilateralism, whereby nimble 'coalitions of the willing' are being formed to deal with specific issues. This trend raises serious questions for longstanding multilateral institutions, such NATO and the EU, in the domain of defense and security. Minilateralism is about coalitions of states with like-minded goals. Instead of the traditional multilateralist approach, which strives for inclusiveness and building consensus across a large number of nations, minilateralism focuses on quick decision-making. This tactic is especially useful in large gatherings where conversation may become stale or in times of emergency when action is needed quickly. Whereas minilateralism can improve collaboration on sensitive matters, it tends to give rise to worries about multilateral systems being splintered. A bias towards minilateral arrangements is also likely to lead to smaller, topic-specific coalitions which could destabilize the larger institutions that operate on the principles of collective security and mutual aid. NATO has served as the bedrock of transatlantic security since 1949, holding that an attack against one is an attack against all, as stated in the alliance's collective defense clause. Yet minilateralism is the new enemy of this principle. Recent years have witnessed a proliferation of minilateral military arrangements, ranging from the Quad (comprising Australia, India, Japan and the U.S.) to AUKUS (entailing Australia, the U.K. and the U.S.), which focus on particular regional security challenges that NATO is ill-suited to mitigate, such as China in the Indo-Pacific. In Europe, the trend toward minilateralism could further splinter NATO. With member nations striking out on their own to create separate pacts, NATO risks turning into a two-tier alliance, with some nations forming closer coalitions at the expense of shared solidarity. Should minilateral alliances become more popular among its members than NATO's obligatory commitments, the alliance's cohesion could be threatened. The idea of a 'two-speed' NATO is already prompting serious consideration about collective security and whether the alliance will be capable of adequately dealing with new threats. States seem inclined to form minilateral arrangements that give them the security they need, often at the expense of NATO's collective decision-making. The political and economic integration of the EU has also been obstructed by a minilateralist push in the defense arena, encouraged by Common Security and Defense Policy. With the emergence of minilateral military interventions, the EU's role as a global actor and its aim to act collectively is under threat. The European Intervention Initiative, for example, designed to improve military collaboration between a specific few EU member states — including France, Germany and the Netherlands — threatens to create parallel structures that could undermine current EU machinery. While member states seek minilateral defense 'solutions,' the EU's joint defense capabilities increasingly fall under threat, and the EU withers away as a player able to confront new security challenges. Minilateralism may give rise to an elitist perception and thus will marginalize the non-participating EU member states. This disharmony creates a split within the EU as some member states might feel left out of important security talks. This divisiveness further complicates the EU's attempts to speak with one voice on the global stage and undermines its global standing. If member states can choose from smaller groupings, as opposed to full EU participation, it is more difficult to assure their commitment to common security and defense. Minilateralism has also eaten into the normative underpinning of classical multilateralism. Institutions such as NATO and the EU are, by their very nature, based on inclusivity, pooled decision-making and collective burden-sharing. But minilateral agreements can be a win for the few at the expense of the many, and undermine prospects for the sustainability of wider multilateral arrangements. This move could result in a reduction of respect for international norms, with states seeking to address more immediate threats to security rather than common interests. If we lose that shared commitment, nations may be more inclined to act unilaterally or in a confrontational manner, irrespective of established international rules. Because of the fragile state of the international order, we should look for the risks that minilateralism poses to traditional multilateral institutions. For as much as minilateral coalitions may provide nimble answers to certain types of security problems, they may also weaken the coherence and efficiency of organizations already in place. NATO and the EU will need to recognize minilateralism as a fact of life and figure out how to help traditional multilateral constructs interact with nascent minilateral bodies. In the end, a combination of minilateralism and the protection of traditional multilateral norms will determine the future of international security. Not only do we need a response to the immediate insecurities, but we also need to defend the multilateral system that has been the bedrock of global peace and cooperation for many decades. NATO and the EU need to both transform themselves and retain what they stand for in order to serve as the cornerstones of our collective security in an uncertain world. Andrew Latham

Consider these factors as the Pentagon dissects AUKUS
Consider these factors as the Pentagon dissects AUKUS

Axios

time9 hours ago

  • Axios

Consider these factors as the Pentagon dissects AUKUS

Everyone has an AUKUS take. Why it matters: The landmark defense pact — designed to arm Australia, the U.K. and the U.S. with nuclear-powered submarines and cutting-edge tech, including hypersonic weapons and electronic jammers — is today navigating choppy waters. Driving the news: The Pentagon's policy office, led by Elbridge Colby, last week announced that by fall it would conclude its "America First" examination of the initiative, which rolled out during the Biden administration. Colby has expressed AUKUS skepticism in the past, namely over resource allocation, but in March said Washington should "do everything we can to make this work." The big picture: As the review proceeds, consider these factors: Shipbuilding shortfalls. The U.S. struggles to construct, maintain and retrofit warships. The Government Accountability Office catalogues it. The Navy cops to it, too. Adm. Daryl Caudle, a career submariner turned chief of naval operations, last month told Congress the "delivery pace is not where it needs to be to make good on Pillar I of the AUKUS agreement." Pumping out the requisite two-plus Virginia-class subs per year, he added, demands "transformational improvement. Not a 10% improvement. Not 20%. A 100% improvement." Actual application. How the Trump administration perceives Australia's commitment to using the subs, and to countering China, could make or break a ruling. "They've been very coy about how they would actually employ the submarines, other than to say, 'Well, it's a deterrent, it could be employed to defend Australia,'" Bryan Clark, a senior fellow at the Hudson Institute, told Axios. "You've got to be willing to say that you would use it offensively if you want to gain the deterrent value out of it," he said, "because China could come away thinking Australia is going to buy these submarines, but they don't have the resolve to use them." Odds Down Under. Almost two-thirds of Australians surveyed in a recent Guardian poll thought it was unlikely the U.S. would deliver subs. And 41% of the voters thought the deal would not affect the country's security. Canberra in July cut a $525 million AUKUS check. Prime Minister Anthony Albanese denied in a television interview that it was an "extra" fee, insisting it was part of the "schedule of payments to be made." "It's about increasing their industrial capacity," he said. Pillar II obscurity. Sub construction — or lack thereof — dominates headlines. Comparably less ink has been spilled on the co-development of defense tech like AI, autonomy and hypersonic countermeasures. Articles published by War on the Rocks in June and the Australian Strategic Policy Institute last year put it succinctly: Pillar II has a public relations problem. Policy and export reform isn't as attractive as novel weapons and their delivery. "The matter at hand — sophisticated, trilaterally supported innovation — seems to be unfurling lethargically," Peter Dean and Alice Nason argued in their War on the Rocks piece. Common ground. A U.K. government spokesperson told Axios it "is understandable that a new administration would want to review its approach to such a major partnership, just as the U.K. did last year." Prime Minister Keir Starmer and President Trump have recently traded compliments, which could bode well for AUKUS. What we're hearing: The trilateral agreement will survive, but perhaps in a somewhat different form and with a less optimistic timetable. "I infer that the administration is pro-AUKUS," one defense industry executive told Axios. "I think, internally, ' the Blob ' is trying to portray it to Trump as a big, beautiful trade deal." "Everyone knows the sub industrial base is stressed, though." The bottom line: The AUKUS anxiety is legit. The ongoing review is additional evidence nothing is sacred under Trump 2.0.

From 'great friend' to 'tariff king': The changing shades of the U.S.-India relationship
From 'great friend' to 'tariff king': The changing shades of the U.S.-India relationship

CNBC

time11 hours ago

  • CNBC

From 'great friend' to 'tariff king': The changing shades of the U.S.-India relationship

In February, U.S. President Donald Trump and Indian Prime Minister Narendra Modi exchanged warm greetings and bear hugs, and pledged to pursue an early trade agreement. Now, six months on, that goodwill has soured. Trump labels India the "tariff king," threatens higher levies within 24 hours, and accuses it of fueling Russia's war in Ukraine through oil purchases. That shift raises questions: Will India yield to U.S. pressure, or push back and risk straining a two-decade partnership? Former Singapore diplomat Bilahari Kausikan told CNBC that India will always prioritize its national interests. "India is [a] country with a deep sense of self as an independent actor," he said, adding it will "never play deputy to any sheriff." On Wednesday, Trump vowed to "substantially" raise tariffs on Indian exports, following a 25% hike and threats of penalties over Russian oil and arms purchases. That marks a stark reversal from earlier optimism, when Modi and Trump aimed to double bilateral trade to $500 billion by 2030. Vice President JD Vance had agreed on terms for a trade deal, and Commerce Minister Piyush Goyal had anticipated "preferential" tariffs just days before the hike. But Kausikan, who was also former permanent secretary of Singapore's foreign service, said it's "absurd to think that just because New Delhi is shocked at Trump's tariffs, his insulting characterization of the Indian economy as 'dead' and his flirtation with Pakistan, India will swing to China or Russia at U.S. expense." He was referring to Trump's post on social media, which called the economies of both India and Russia "dead." India leaned toward the Soviet Union during the Cold War, but after the USSR's collapse, India deepened relations with the U.S., especially under Presidents George W. Bush and Barack Obama. "What brought India and the U.S. together was a shared concern over China," Kausikan noted. "That concern isn't going away." Today, the two nations had elevated their partnership to a "Comprehensive and Global Strategic Partnership" with cooperation in defense, technology, and clean energy. India was designated a "major defense partner" by the U.S. in 2016. However, Evan Feigenbaum, Vice President of studies the Carnegie Endowment for International Peace warned in a commentary Monday that Trump's actions could unravel more than two decades of progress. Speaking on CNBC's "Squawk Box Asia," he said although there were points of disagreement in their bilateral relationship — such as India's ties with Russia and the United States' ties with Pakistan — "they never let those third party relationships or concerns bleed back into the bilateral relationship in ways that were very debilitating." "All bets are off now," he added. India's External Affairs Ministry responded sharply to criticism over Russian oil purchases Tuesday, calling it "unjustified and unreasonable." The ministry also pointed out that Western nations criticizing India are themselves continuing to trade with Russia. Feigenbaum said India sees that as "hypocritical" and "blame shifting," saying that the West's collective failure to stop the war is now being pinned on India. He also noted growing unease from New Delhi over the United States' outreach to China. Former U.S. ambassador to the U.N. Nikki Haley urged the administration not to "burn a relationship with a strong ally like India," highlighting that China, which is Russia's top oil buyer, received a 90-day tariff pause in May. Prospects for a trade deal appear slim. Feigenbaum said Indian media, the public, and the opposition are urging the government not to show weakness. "Even if there's a deal, the trust is gone," he said. Former Indian Finance Secretary Subhash Garg echoed that sentiment: "Our positions are so different that there is very little possibility of a reconciliation." He suggested India should absorb the export hit and diversify to domestic or alternative markets. "If there is an American demand, they will buy and let [the] American consumers and the importers pay the tariff. Let them bear that." However, former Indian Labor Secretary Sumita Dawra expressed cautious optimism. She said India hopes for "positive outcomes" from trade talks later in August. She said while tariffs may have an impact on exports, India's domestic demand is "very high," and pointed at other trade agreements that the country has been making, such as the India-U.K. free trade agreement and the India-EU FTA, negotiations of which are expected to conclude later this year. "We're looking for a fair, mutually beneficial deal," Dawra said. "I'm sure our negotiators will do a great job."

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