Good morning and happy Sunday,

This is Pacific Weekly, a special edition of The Intel Brief intended to keep you updated on events across the hotly contested Indo-Pacific region.

Reporting Period: 9-15 June 2025

Bottom-Line Up Front:

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U.S. Initiates Review Of AUKUS Pact

Summary
The Pentagon has launched a comprehensive review of the AUKUS submarine pact — under which the U.S. and UK are to transfer nuclear-powered submarines to Australia by the 2030s — due to strategic, industrial, and fiscal pressures. Although the pact remains central to U.S. Indo-Pacific deterrence, allied leaders in Canberra and London have reaffirmed their commitment and criticized any delay, even as analysts in Australia question its cost-effectiveness.

Findings

• Pentagon-Led Review: Under Secretary Colby is reassessing the U.S. role in Pillar I (Virginia-class submarine transfer), citing concerns that it may strain U.S. naval capacity amidst rising Chinese naval dominance (now ~370 vessels) and align poorly with "America First" priorities.

• Australian and British Pushback: Both Canberra and London underscore bipartisan support for AUKUS; Australia is investing more than $50 billion in shipyards and workforce upgrades. Defense Minister Marles rejects any weakening of the pact.

• Cost and Sovereignty: Critics, including cross-bench Australian lawmakers, demand transparency and a parliamentary inquiry into the pact's projected $368 billion cost, warning of budget overruns and sovereignty erosion.

• Strategic Focus: Analysts caution that while the U.S. may be reevaluating AUKUS, its broader intent—countering China—remains intact. Trump-era policy demands ensure allies contribute "fair shares." Alternative strategies, such as cheaper anti-access systems, are being considered.

Why This Matters
AUKUS serves as the linchpin of Western deterrence in the Indo‑Pacific; destabilizing it risks undermining collective undersea warfare capability against China, emboldening Beijing’s maritime operations. At the same time, the U.S. review underscores growing fiscal and industrial constraints under an “America First” framework. Partner nations’ continued financial and political support will determine whether AUKUS evolves into a sustainable bulwark or falters amid shifting U.S. priorities.

Sources: The Guardian, Financial Times, The Washington Post, SCMP, The Guardian

Trump Announces U.S.-China Trade Framework

Summary
President Trump and Chinese President Xi Jinping have agreed in principle on a new trade framework aimed at resolving import-export tensions. China is committed to resuming exports of rare earth minerals—critical for U.S. defense, tech, and automotive industries—and the U.S. will set tariffs on Chinese goods at 55%, while China imposes 10% tariffs on U.S. imports. The framework is pending final approval by both leaders.

Findings

• Rare Earths Access: China will resume supplying rare earth elements and permanent magnets “up front” for at least six months. These minerals—including samarium, neodymium, and yttrium—are vital for fighter jets, submarines, smart bombs, and high-tech manufacturing.

• Tariff Structure Defined: The U.S. will impose a 55% tariff on imports from China—comprised of a 10% baseline “reciprocal” tariff, 20% penalty linked to fentanyl trafficking, and an existing 25% levy. China will apply a 10% tariff on U.S. goods, continuing their baseline reciprocal rate.

• Duration and Conditions: China’s commitment to rare earth exports is for an initial six-month period, leaving long-term provisions unresolved. The framework builds on a previous Geneva agreement that paused tariff escalations, but full implementation awaits final presidential sign-off.

• Economic Dependencies: The deal underscores U.S. reliance on China for roughly 60–70% of rare earth minerals and nearly 90% of global processing capacity, posing strategic risk. U.S. firms have suffered production slowdowns, with impacts noted in automotive and defense sectors due to export restrictions.

Why This Matters
This agreement highlights the strategic leverage wielded by China in critical mineral supply and reflects U.S. economic pressure points. Securing rare earth access is vital for maintaining America’s defense-industrial base. However, the deal's temporary nature and high tariffs risk economic strain and potential inflation, raising questions about its long-term viability. For policymakers, the agreement underscores the urgency of diversifying supply chains and investing in domestic or allied mining and processing capabilities to reduce dependency on Chinese exports.

Sources: CSIS, The Sunday Times, Reuters, Business Insider, The Guardian,

Philippines To Extend U.S. NMESIS Missile System Deployment

Summary
The Philippines has opted to retain the U.S.-supplied Naval Expeditionary Ship Interdiction System (NMESIS) on Batan Island following its participation in Exercise KAMANDAG 9 in April. This decision reflects Manila’s commitment to strengthening maritime deterrence amid heightened tensions with China in the South China Sea. China has repeatedly denounced the deployment of long-range standoff weapons systems to the Philippines.

Findings

• NMESIS Deployment: The Philippines first received NMESIS during Exercise KAMANDAG 9 in April 2025. Manila has decided to keep the system operational on Batan Island beyond the exercise, indicating its role in long-term maritime security measures.

• System Capabilities: NMESIS fires the Norwegian Naval Strike Missile with a remotely operated launcher system (ROGUE-Fires) mounted on a Joint Light Tactical Vehicle (JLTV) chassis. This system allows U.S. Marines to target and destroy enemy ships from land-based positions, enhancing their expeditionary maritime interdiction capabilities.

• Strategic Significance: Batan Island lies approximately 120 miles south of Taiwan, placing NMESIS in a position to monitor and challenge Chinese naval activity near the Luzon Strait.
  This is particularly relevant given the CCP’s continued incursion into Philippine territorial waters.

• Regional Deterrence Posture: The installation reinforces the Philippines’ growing maritime deterrence posture, while deepening defense collaboration with the United States under the 1951 Mutual Defense Treaty and the Enhanced Defense Cooperation Agreement.

Why This Matters
By retaining NMESIS, the Philippines is enhancing its asymmetric maritime deterrence capabilities at a strategic chokepoint. Situated near the Luzon Strait, the system can serve as a deterrent against Chinese naval incursions toward Taiwan or the South China Sea. This move also signals deepening U.S.–Philippine defense cooperation and supports broader regional efforts to uphold freedom of navigation and stability in contested maritime zones.

Sources: Newsweek,

End Brief

That concludes this edition of Pacific Weekly.

Thanks for reading. I’m happy to be back!

Nick