Doorstop, Arlington Virginia

SUBJECTS: Meeting with Secretary Hegseth; US-Australia Alliance; AUKUS; Trade; Middle East Conflict; USAID.  

RICHARD MARLES, DEPUTY PRIME MINISTER: It was my honour today to meet with Secretary of Defense, Pete Hegseth, and to be the first of his defence counterparts around the world to meet with him since he's taken up the office of the United States Secretary of Defense. We had a very warm meeting, following on from the very warm phone conversation that we had last week. We are very encouraged by the strength of American leadership, as demonstrated by the comments of Secretary Hegseth, and indeed others in the Trump Administration, particularly the strength of American leadership in the Indo-Pacific. It is really clear that there is a focus on our region, our part of the world, in terms of the way in which America sees itself in terms of expressing its leadership in the world. As part of this, we talked about AUKUS and how fundamentally important it is in the contemporary expression of our Alliance. AUKUS is playing a really important role, not only in terms of building Australian capability, building Australian capability in the provision of a long‑range nuclear‑powered submarine capability, but also building American force posture on the Australian continent, and this is a very important statement for our region. We talked about that and how we can further cooperate and advance what is the most important relationship that we have in terms of both our foreign policy and our national security. We look very much forward to working with Secretary Hegseth and the Trump Administration in terms of taking the Alliance forward.

JOURNALIST: Mr Marles, was there any discussion about the Australian defence budget? Did you discuss that at all? And secondly, how would you characterise the view of Mr Hegseth towards China?

MARLES: Well, we very much talked about the fact that right now Australia is increasing its defence spending. We are seeing in Australia one of the largest increases in defence spending in our peacetime history. I made that point, and Secretary Hegseth was aware of that. We are doing that through AUKUS, obviously, and through acquiring the nuclear-powered submarine capability in the process. And you're aware of this, obviously, we made clear that we are making the first of the payments to the American industrial base for its submarine enterprise. That we've been able to do that in the first couple of weeks of the Trump Administration, we were able to do that in the first week of Secretary Hegseth’s term as the Secretary of Defense, we're really pleased about that. So we were able to reiterate all of those points. In terms of your second question, I think it's really clear that Secretary Hegseth and the Trump Administration are very focused on the challenges in the Indo-Pacific, and that is very pleasing to us. There is definitely an appreciation of the challenges to the rules‑based order that we see within our region and Secretary Hegseth and this administration is focused on it. 

JOURNALIST: Did he give any assurances that the submarines would be delivered on time?

MARLES: Well, look, we have been working really closely with the US around that, and you heard his comments at the front of the meeting directly in respect of that question. We get the challenges in terms of the rate of production and sustainment of submarines here in the United States. That's why we are making a contribution to the US industrial base. And the point that we both made in our meeting is that we jointly need to succeed to see this happen – both in terms of American capability, but ultimately Australian capability as well. And being able to increase those production rates, those sustainment rates, getting more Virginias in the water, seeing Australia acquire our Virginia class submarines in the time that we've agreed is really important in terms of the deterrence that it provides. 

JOURNALIST: Do you anticipate that there will be any kind of ask from the Americans for more money for their industrial base, so that they can get these submarines out on time?

MARLES: Look, I think the very unique nature of the agreement that we have where we are not only paying for the Virginia class submarines, but in addition to that making a contribution to the tune of billions of dollars to the United States industrial base, is a very unique and significant step. And I think that was appreciated, as it was that we’ve made the first payment in respect of that in the last week. 

JOURNALIST: And that was $500 million Australian?

MARLES: No, it’s $500 million US. So it's $3 billion US, is the total commitment, and the first payment that we’ve made is $500 million US. 

JOURNALIST: There was no indication that they want more? I mean, we know that Mr Trump wants everybody to pay more, including his close allies. There's no indication you got that they expect us to do more?

MARLES: As I said, I think what there was, was an acknowledgement that this is a very unique arrangement, that we're not seeing this in any other arrangement in the world, literally. And what it says is the determination on the part of Australia to make this work, that we understand how important it is that America has a submarine capability and that the production rates are there to meet that, but how critical it is to ultimately making the optimal pathway for Australia to acquire a nuclear-powered submarine capability to work. 

JOURNALIST: Deputy Prime Minister, did you ask for an assurance that the $3 billion price tag for the submarine production boost was going to be the final price tag? 

MARLES: This is the agreement that we have with the United States and we are really happy with the conversations that we've had with the Trump Administration in relation to this. It's an agreement that is public, that we've obviously made with the former administration. But I think the point I would make is that the optimal pathway – which is now underpinned in a trilateral treaty between our three countries, which I signed in Washington back in August of last year – is an agreement that is going to endure over decades. It's going to endure over multiple administrations in the United Kingdom, Australia and here in the United States. And we are very confident about its future progress and we are very confident about its progress under this administration.

JOURNALIST: President Trump said today that next week he's going to look at reciprocal tariffs, today threatening Japan and said that yes, next week there will be reciprocal tariffs that he will look at between the United States and Japan, and he said he would look at it with other nations around the world. Is Australia concerned about direct reciprocal tariffs, or a flow on effect from that?

MARLES: We obviously are engaging with the United States in respect of our bilateral relationship in respect to tariffs. We'll continue to do that. We’ll obviously press Australia's interest in our case in respect of that. But none of this is a surprise. I mean, we know what President Trump’s platform was as he went into the American election. He's been very clear about his policy direction. And so I think we all understand that is going to see changes in American policy in relation to this. From an Australian point of view, we will continue to press the Australian case around the question of trade. We are an island trading nation where trade forms an increasing share of our national prosperity. Our interest in this is clear, and we'll continue to pursue that interest.

JOURNALIST: Mr Marles, did you seek to clarify US plans in relation to Gaza? And do you have any concerns about the US taking a long-term ownership position? 

MARLES: Look, our focus today was very much on the Alliance, on our relationship with the United States in relation to that, the key equities in that Alliance, namely AUKUS, on American presence in our region. That was the focus of the conversation and that is where my attention is directed in terms of engaging in the relationship with the United States. 

JOURNALIST: But Labor and the US are at odds on this issue aren’t you?

MARLES: As I say, our focus is on our relationship with the United States and the issues that we have in respect of that. And as I’ve indicated, that's where the conversation was focused. Our position–

JOURNALIST: So it didn’t come up? 

MARLES: We did not go through that. Our position in relation to the Middle East is clear. Obviously, we welcome the ceasefire that is there. It's important that the global community is supporting that ceasefire. And in the longer term, our position is in support of a two state solution, which of course, has been the bipartisan position in Australia for a long time. 

JOURNALIST: Just to clarify, on that $3 billion figure, does the Australian government expect that figure to remain the same? 

MARLES: Well, that is the agreement that we have with the United States. 

JOURNALIST: And just to clarify, a two state solution from Australia's point of view has to involve the Palestinian state in Gaza?

MARLES: Our position is really clear, it’s what it has always been, and that is really all I would say in relation to that. What I'm not about to do is engage in a running commentary on the remarks of the President. Our position in relation to the Middle East is clear. But really the issues that we have sought to pursue in terms of this initial meeting with Secretary Hegseth are the fundamentals of the Alliance, which is really at the centre of our national security and there's much to discuss there, and that was the focus on our discussion.

JOURNALIST: Secretary Hegseth mentioned in his opening remarks that we've been in every conflict with the US since World War Two. If there were boots on the ground in Gaza, American boots, is that policy under review for Australians to join that?

MARLES: Look, the last thing I'm going to do is answer a hypothetical about any future prospects of conflict. What his remark reflects is that when you look at the history of our relationship in respect of the Alliance, we have been there side by side with the United States in respect of every conflict since the First World War. And what comes from that is a deep trust that has been built up between our two nations, which is such an asset in this moment and really so important for the US, obviously very important for Australia, and underpins all that we do. 

JOURNALIST: Do you have any concerns about the impact of the dismantling of USAID, specifically in the Pacific, and creating a vacuum for China?

MARLES: Well, again, I'm not about to go into a commentary on that. We are very engaged in the Pacific, as you know. The Pacific is a very important region from the perspective of Australia. We have consistently advocated to American administrations about the need for America to play its role in the Pacific. To be fair, actually, under the first Trump Administration we saw a real step up in America's engagement in the Pacific, and we'll continue to advance that case. And we see a very significant presence of America amongst Pacific island countries in lots of ways, such as the US Coast Guard, for example, which plays a really important role in terms of having ship riders on board and therefore being able to play a role in enforcing the exclusive economic zones of those countries, which is their most important economic asset. We will continue to have that conversation with the United States. 

JOURNALIST: [inaudible] minister to have a meeting with Pete Hegseth. Penny Wong was one of the first meetings with Marco Rubio. Does that give you confidence that the relationship with the US will continue to remain positive, and you won't see retaliatory tariffs, for example, implemented against Australia? 

MARLES: Well, look, I have a great deal of confidence about the how the relationship will progress between our government and the Trump Administration. I mean, there has been nothing other than positivity about Australia, about the Alliance, about the place of AUKUS within the Alliance, in all the conversations that we have had with members of the Trump Administration. And as we look forward to the challenges that we face as a nation, when we look at our strategic landscape, when we look at the importance of American leadership in the world, but specifically in the Indo-Pacific, we see all of that being met by the Trump Administration. It was a really good meeting with Secretary Hegseth today. I'm really looking forward to pursuing my relationship with him. But I think we are all excited about the prospects of how we can work with the Trump Administration going forward.