Welcome back to Foreign Policy’s Situation Report and a happy belated birthday to John, who turned [REDACTED] on Tuesday and promptly conducted an in-depth interview with former Israeli Prime Minister Ehud Olmert. Also, welcome back to Rishi, whose vacation last week was unexpectedly eventful due to his attendance of a certain Coldplay concert in Boston.
Alright, here’s what’s on tap for the day: Australia awaits the Pentagon’s AUKUS reviewa flare-up of hostilities on the Thailand-Cambodia borderand the Trump administration’s new Ai Action Plan.
U.S. President Donald Trump’s proclivity for renegotiating, reneging on, or altogether abandoning long-standing international agreements and partnerships is well documented at this point of his second term. One of the United States’ closest allies in the Pacific is now worried that its most important defense deal could be the latest to end up on the chopping block.
Signed in 2021 under former U.S. President Joe Biden, the AUKUS agreementamong Australia, the United Kingdom, and the United States, commits in part to providing the Royal Australian Navy with secondhand U.S. nuclear-capable submarines starting in 2032, with the joint development and deployment of new submarines by the United Kingdom and Australia starting in the 2040s.
Last month, the U.S. Defense Department confirmed a Financial Times report that it was reviewing the agreement, whose second pillar also includes broader cooperation among the three countries on technologies including artificial intelligence and quantum computing. That review has been causing consternation in Canberra, including fears that Trump could choose to walk away from the pact altogether.
“To say there’s been a little hand-wringing and concerned discussion in Australia would be a bit of an understatement,” Eric Lies, a fellow at the U.S. affiliate of the Australian Strategic Policy Institute, an Australian government-backed think tank, told SitRep. Australia paid its second installment on the submarine deal to the United States this week despite the ongoing review, pushing the total it has paid thus far over $1 billion. “The risk of turning up empty-handed with respect to nuclear-powered submarines is understandably causing angst,” Lies said.
Some of that concern stems from the man reportedly in charge of the review: Elbridge Colby, the U.S. undersecretary of defense for policy. Colby is a self-described “skeptic” of AUKUS, explaining during his confirmation hearing in March that his main concern was that supplying submarines to Australia would leave the United States short on its own supply in the event of a crisis such as China attacking Taiwan.
Yes, but… A counterargument is also gaining momentum in both Australia and the United States: Don’t panic. That was very much the overarching message at a roundtable discussion on the two countries’ bilateral relations that your SitRep co-author attended on Thursday morning, which was conducted under the Chatham House rule.
There is perhaps a case to be made that for all its unpredictability, the Trump administration has remained largely committed to the United States’ major alliances and partnerships thus far. As we reported, Trump came away from last month’s NATO summit in The Hague seemingly as committed to the trans-Atlantic alliance as ever—helped by European commitments to increase defense spending and an immense amount of flattery. Even the Quadrilateral Security Dialogue, another minilateral grouping that includes the United States and Australia, has been hunky-dory thus far.
That the AUKUS review will end badly is also not a given, as many have pointed out. “Colby has been on the record questioning AUKUS, but that doesn’t mean the deal is dead,” Lies said. “It should also be noted that conducting reviews of major programs after a new administration is sworn in is nothing new and is vital to ensuring that programs continue to be in the best interest of the people.”
For those looking for more reassurance, the U.K. government conducted a similar review of the program last year and subsequently committed to building 12 new submarines under the AUKUS program after a broader strategic defense review.
Beating Beijing. At the same time, concerns about the AUKUS review are in some ways a proxy for broader concerns around growing Chinese influence in Australia. Australia has long been caught between the two powers, with the United States its closest security ally and China its biggest trading partner.
China has replaced its “wolf warrior diplomacy” with more of a charm offensive since Australian Prime Minister Anthony Albanese entered office in 2022, and it appears to be making inroads. An annual poll by the Sydney-based Lowy Institute, conducted in early March, showed an uptick in the proportion of Australians who saw China mainly as an “economic partner” and a corresponding dip in the proportion who saw it as a “security threat.”
Albanese’s predecessor, Scott Morrison, one of the main architects of the AUKUS agreement, was in Washington this week sounding exactly that warning. “I would highlight the need to never become casual about the potential threat and to remain vigilant,” Morrison said while testifying in front of the House Select Committee on the Chinese Communist Party (CCP) on Wednesday. “In the same way that the CCP seeks to target our alliances and partnerships, these same relationships must form the core of our shared response,” he added. “Strengthening and deepening the networks of U.S. alliances and partners is critical to resilience and deterrence.”
Libby Lester has been made associate director of presidential gifts.
Julie Callahan was nominated to be chief agricultural negotiator within the Office of the U.S. Trade Representative.
Chris Lynch has been named special assistant to the president and deputy director at the Office of Presidential Correspondence.
What should be high on your radar, if it isn’t already.
Cambodia and Thailand trade blows. There are rising concerns about the potential for a broader conflict between Cambodia and Thailand as the two Southeast Asian nations traded fire on Thursday amid escalating tensions linked to a long-running border dispute. Both sides accused the other of firing first. Thailand, which alleged that Cambodia fired rockets into civilian areas, conducted airstrikes on Cambodian military targets.
Thursday’s deadly exchanges came after a Thai soldier patrolling near the border lost a limb to a landmine on Wednesday, prompting a downgrade in diplomatic ties between the two countries. China, which has close economic ties with both countries, on Thursday said it was concerned about the dispute and would work to promote “peace and dialogue to help ease tensions.”
Gaza truce talks stalled (again). Negotiations for a new Gaza cease-fire and hostage deal hit yet another roadblock on Thursday, and both Israel and the United States have recalled their negotiation teams from Qatar. Israel said it was reviewing Hamas’s response to the latest cease-fire proposal. Meanwhile, U.S. special envoy Steve Witkoff wrote on X that Hamas’s response “clearly shows a lack of desire to reach a ceasefire in Gaza.” Witkoff said Washington would “now consider alternative options to bring the hostages home and try to create a more stable environment for the people of Gaza.”
This comes amid rising pressure for a deal to be reached as the international community continues to criticize Israel’s approach to the war and its restrictions on humanitarian assistance—with the United Nations raising alarm that Palestinians in Gaza are beginning to look like “walking corpses.” The World Health Organization this week warned of “man-made” mass starvation in Gaza, as reports indicate that aid workers, doctors, and journalists are also going hungry.
Hostage families in Israel are also growing increasingly impatient for an agreement that would see their loved ones returned home.
Plan of A(I)ction. The White House on Wednesday rolled out its Ai Action Plana 23-page document that outlines the Trump administration’s approach to the development and regulation of artificial intelligence. The plan consists of three pillars, including the acceleration of AI innovation and the building of more U.S. AI infrastructure. Those two pillars focus on slashing government regulations around AI (which one administration official told reporters includes “DEI [diversity, equity, and inclusion] and climate requirements”) and ensuring that AI “protects free speech and American values.” It also calls for a more streamlined approval process to build data centers and semiconductor manufacturing facilities across the United States.
But as FP staff writers, we were naturally more interested in Pillar III, which focuses on ensuring that the United States leads in “international AI diplomacy and security.” The plan recommends doing so by exporting U.S. AI models to allies and partners, ensuring that the U.S. government is heavily involved in evaluating national security risks of the most advanced AI models, and strengthening the export control regime for the semiconductor chips that power those models. Given Trump’s well-known disdain for multilateral institutions, we were also struck by the plan’s call to “counter Chinese influence in international governance bodies” such as the United Nations and the G-20.
Palestinian children wait for a meal at a charity kitchen in the Mawasi area of Khan Yunis in the southern Gaza Strip on July 22. AFP via Getty Images
Friday, July 25: U.S. Secretary of State Marco Rubio is set to meet Pakistani Foreign Minister Ishaq Dar in Washington.
“He has these think tanks. They build buildings for people that think.”
—Trump on Tuesday speaking about U.S. Federal Reserve Chair Jerome Powell.
A man in India was arrested for establishing a fake embassy and taking money from people by offering false promises of overseas work. Authorities said the man, Harshvardhan Jain, pretended to be a diplomat for fictional nations such as “Seborga” (which we hear is lovely this time of year) and “Westarctica.” Jain was allegedly running this operation out of a rented residential building, and police seized cars with fake diplomatic plates and discovered doctored pictures of him with world leaders.
