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Recent leaks about America’s 2026 National Defense Strategy have set tongues wagging and no doubt will trigger heightened anxiety in Canberra as US isolationism and reduced Indo-Pacific presence appears to be back on the menu.
A long-standing pillar of America’s defence and national security ecosystem, the biannual National Defense Strategy (NDS) serves to provide a rolling, constantly evolving, almost living “publication of record” detailing the strategic assessments, challenges, opportunities and response by the United States.
From 2015, the strategic baseline was still shaped by the post-9/11 years and the Obama administration’s National Security Strategy, which emphasised partnerships, counter-terrorism and a steady-state approach to global commitments, while also heralding a major shift towards countering then rising Chinese antagonism in the Indo-Pacific, culminating in Obama’s vaunted “Pacific pivot”.
The first Trump administration marked a shift crystallised with the 2018 National Defence Strategy: the Department of Defense explicitly recentred its priorities on long-term great-power competition, highlighting and naming the re-emergence of peer competitors and the diffusion of advanced technologies as the primary strategic challenge and called for a more lethal, resilient and rapidly innovating joint force.
Fast-forward to the Biden administration’s 2022 National Defense Strategy, which is built on that turn but moved from a simple “pacing challenge” diagnosis to a doctrine called integrated deterrence – combining conventional, nuclear, cyber, space and diplomatic levers, and stressing alliance cohesion.
At the centre of this shift was the accelerating rise of the People’s Republic of China, prompting a recalibration in US force posture, with a continuation of the first Trump administration’s emphasis on the Indo-Pacific and investment in modernisation (including nuclear and missile defences).
That document framed China as the “pacing challenge” while still recognising other regional threats, largely driven by developments in Europe and the Middle East and the need to compete below the threshold of war.
Since 2024–25 the Pentagon has been drafting a successor NDS (being developed under the current leadership of the second Trump administration), which at the foundation of this new approach will undoubtedly place “America First” and an increasingly “domestically” focused defence strategy and posture.
This has been reinforced over the weekend, following a piece in the US-based publication Politico titled Pentagon plan prioritizes homeland over China threat by Paul McLeary and Daniel Lippman in which they reveal, amid discussions with unnamed sources, a renewed focus on homeland and western hemisphere missions, a push for greater burden-sharing with allies, and debates about how much risk the US should accept in places such as Europe or the Middle East.
Accordingly, this shift has prompted a heightened degree of anxiety among US allies, including Australia, as the proposed shifts have raised questions about whether Washington is reorienting away from the global posture laid out in 2018–22, with major implications for these nations, not least of all Australia.
Implications for Australia’s defence spending
Undoubtedly, the increasing shift away from the role of “global policeman” played by the United States since the end of the Second World War, which only accelerated following the collapse of the Soviet Union at the centre of the Trump “America First” doctrine, will have major implications for Australia.
Long dependent on the strategic umbrella provided by the United States, the increasing tensions between Washington and Canberra over defence spending will be increasingly shaped by the expectations of the Trump administration for its allies and their levels of defence spending.
McLeary and Lippman articulated the shifting priorities of the second Trump administration, saying, “Pentagon officials are proposing the department prioritise protecting the homeland and western hemisphere, a striking reversal from the military’s years-long mandate to focus on the threat from China.
“A draft of the newest National Defense Strategy, which landed on Defense Secretary Pete Hegseth’s desk last week, places domestic and regional missions above countering adversaries such as Beijing and Moscow, according to three people briefed on early versions of the report.”
The growing tensions between Australia and the United States have seen Australia’s prime minister, Anthony Albanese, dig his heels in over our levels of defence spending, often in direct defiance of broader advice and commentary around the nation’s level of defence spending, particularly the reluctance by the Australian government to lift spending beyond the expected 2.3 per cent of gross domestic product (GDP) by the 2033–34 timeline.
McLeary and Lippman detailed the domestic impact of the Trump administration’s proposed departure from long-held bipartisan US defence and national security policymaking, saying, “The move would mark a major shift from recent Democrat and Republican administrations, including President Donald Trump’s first term in office, when he referred to Beijing as America’s greatest rival. And it would likely inflame China hawks in both parties who view the country’s leadership as a danger to US security.”
Equally important is the marked departure from the policy foundations established by the first Trump administration’s National Defense Strategy from 2018 which firmly established the mounting great power tension and competition between the United States, the People’s Republic of China and Russia as the central and major security challenges faced by the US-led world order.
McLeary and Lippman said, “The new strategy would largely overturn the focus of the first Trump administration’s 2018 National Defense Strategy, which placed deterring China at the forefront of the Pentagon’s efforts ... The shift ‘doesn’t seem aligned with President Trump’s hawkish views on China at all’, said a Republican foreign policy expert briefed on the report, who like others was granted anonymity to discuss sensitive issues.”
Adding further complications for Australia’s own strategic policymaking and planning is the involvement and seeming empowerment of Elbridge Colby, the serving Under Secretary of Defense/War for Policy who has long been identified as both a China hawk and an advocate for a major reprioritisation and reorientation of America’s foreign military deployments and posture.
Colby, who has frequently been cited as a major stick in the wheels for Australia’s pursuit of conventionally armed, nuclear-powered submarines under the trilateral AUKUS arrangement, is also currently in the midst of two concurrently running, yet equally important reviews into US overseas force posture, basing and deployment and a “theatre” air and missile defence analysis.
Both of which will undoubtedly inform the 2026 National Defense Strategy and have major implications for Australia’s own level of defence spending, despite the push-back from the Albanese government.
McLeary and Lippman detailed this confluence of factors, saying, “Colby’s policy team is also responsible for a forthcoming global posture review, which outlines where US forces are stationed around the globe, and a theater air and missile defense review, which takes stock of US and allies’ air defences and makes recommendations for where to locate American systems. The Pentagon is expected to release both reviews as soon as next month...”
“The three documents will be intertwined in many ways. Each will emphasise telling allies to take more responsibility for their own security, the people said, while the US consolidates efforts closer to home. Allies are especially worried about the fallout of the global posture review, given that it could pull US troops away from Europe and the Middle East and cut critical security assistance programs,” they added.
Regardless the figure, current and targeted spending figures will feel like a bargain
If what McLeary and Lippman stated are set to come to fruition, particularly with what is set to be revealed in coming weeks or months as part of the foreshadowed global posture review, Australia’s planned level of defence spending uplift outlined as part of the 2023 Defence Strategic Review and supporting 2024 National Defence Strategy and Integrated Investment Program will be woefully inadequate.
As it stands, many a commentator, analyst and even average Australian already feel that the 2.33 per cent of GDP earmarked is leaving Australia dangerously exposed, particularly following renewed and recent revelations about yet more obfuscation and almost belittling of public concern about the traversing of the Tasman Sea by a Chinese naval task group by the government.
This feeling of obfuscation and almost lack of concern particularly by Prime Minister Albanese doesn’t mean that the central reality, that being that a more “isolationist” United States force posture, will inescapably require a dramatic increase in Australia’s defence spending, and despite what people may think, 3 or 3.5 per cent, both of which have been identified as the new “floor” for NATO defence spending, simply won’t cut it.
As a result, our current level of defence spending and investment will ultimately feel like a bargain, as the mounting pressure, potential for kinetic conflict and great power competition and coercion – not just by Beijing but by other regional great powers like India, Indonesia and others – will increasingly place pressure on Australia.
For many Australians, this will come as an immense and rude shock, particularly as many have grown up in “the shade of trees, planted by others” and a world where intense geopolitical competition, national tribalism and a host of other realities, once considered consigned to the history books, return with vengeance.
This will require Australia to markedly increase its defence spending and clearly identify and protect its national interests and security as they intersect and come under fire in the Indo-Pacific, whether we like it or not and no matter what it may cost in terms of our own domestic political sacred cows.
Unfortunately for the Prime Minister, spending 3 per cent of our national gross domestic product looks like an unavoidable reality, while spending beyond that, and I would dare say closer to 5 per cent of gross domestic product on defence, will become the “new normal” in the not too distant future.
Final thoughts
Australians, government and public alike are about to face some hard truths if we’re serious about securing our future.
The Indo-Pacific is now the world’s most contested region. China, India, Pakistan, Thailand and Vietnam are flexing new muscle, while Japan and South Korea are pushing back onto the stage. This isn’t competition on the horizon – it’s already here, and it’s here to stay. Our national strategy must reset to match this reality.
Without serious, sustained investment and long-range planning, we won’t just lag behind, we’ll be left in the wake of our neighbours’ momentum. If we fail to act, the next generation will inherit a country overshadowed by richer, stronger, more influential powers.
For too long, governments have chased short-term wins and reactive fixes. But the ground is shifting beneath us. Business as usual won’t cut it. We need to think ahead, seize opportunities and blunt threats before they overtake us.
The question isn’t whether these challenges are coming – they’re already here. The real question is when Canberra will finally deliver a bold, detailed plan that rallies industry and the public behind a clear national vision.
With China pressing its advantage, Australia faces a stark choice: stand by as a passenger in our own region or step up as a shaper of the Indo-Pacific’s future. The decisions we take now will determine whether we thrive in this new era or get swept aside by it.
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
