SVG
Commentary
Financial Review

What Trump鈥檚 Iran and NATO Show Means for Australia

The US president gives more to allies that do more, spend more, and take more risks. Passivity is the danger, and free riding will be ruthlessly punished.

john_lee
john_lee
Senior Fellow
US President Donald Trump gestures as he speaks to the press following the NATO summit on June 25, 2025, in The Hague, Netherlands. (Andrew Harnik via Getty Images)
Caption
US President Donald Trump gestures as he speaks to the press following the NATO summit on June 25, 2025, in The Hague, Netherlands. (Andrew Harnik via Getty Images)

Donald Trump achieved what he wanted. He had the world鈥檚 undivided attention for two weeks. Will he or won鈥檛 he bomb Iran or assassinate Ayatollah Ali Khamenei?

As we know, he did use his bombs 鈥� including the F-bomb when Israel and Iran breached the president鈥檚 ceasefire 鈥� then arrived triumphantly at The Hague for the NATO summit. Trump was credited by General Secretary Mark Rutte as being the reason why member states (except Spain) agreed to increase

That Trump is a showman with a unique capacity to captivate both admirers and detractors is undeniable. The temptation is to attribute his leadership style to being driven mainly by personal vanity and the desire to be the centre of attention. I will leave the analysis of his psyche to psychiatrists and psychologists who assess these issues.

With respect to what we ought to take away from the past two weeks, it is this: behind the performance, there is substance and seriousness to him when it comes to some elements of international politics. And there are three key lessons which are relevant to Australia and the Albanese government.

First, Trump is remarkably consistent about some core objectives that he has held for over a decade 鈥� Iran must not be allowed to have a nuclear weapon; allied defence spending must increase as a proportion of GDP to justify America using its blood and treasure to protect them; American deindustrialisation is a source of immense security, economic, and social vulnerability to the country; and tariffs are an effective way to use the leverage of the unrivalled size of the American domestic consumption market to bring back manufacturing onshore. He has held these beliefs for at least a decade, and in the case of alliances and tariffs, far longer.

It is his tactics that are confusing, disruptive, and highly unpredictable. If we focus on just his tactics and not his objectives, then we do not take Trump as seriously as we ought to. That will be to our peril.

Second, he is highly opportunistic and feeds off the success or boldness of allies and partners. He will then give himself the lion鈥檚 share of the credit for the outcome. For example, Israel had done the hard work of disabling Iran鈥檚 air defence systems, established an extraordinary intelligence network within Iran which it weaponised, and generated paralysis and chaos through the elimination of key military and scientific figures.

Trump鈥檚 tactics towards both adversaries and friends is to compel and coerce through the manipulation of risk in his favour.

Although Trump is serious about maintaining American military primacy, he has a clear distaste for war. That鈥檚 not a bad thing. However, when it became clear that the Iranians were unlikely to agree to dismantle their nuclear weapons program voluntarily, Trump made the difficult decision to bomb Iran. Of course, he then promptly claimed the credit for destroying Iran鈥檚 nuclear program.

Israel might be annoyed at Trump underplaying the Israeli contribution. But Trump ultimately deployed American hard power in a way that suited Israeli interests. The bolder the actions and risks taken by allies for the sake of objectives aligned with those of the Trump administration, the better an ally and protector America will be.

Third, Trump鈥檚 tactics towards both adversaries and friends is to compel and coerce through the manipulation of risk in his favour. This sounds like obscure policy talk. It basically means the use of coercion or credible threats to create disproportionate anxiety for leaders and decision makers.

For Iran, it was to the Ayatollah Ali Khamenei: you might survive, or you might be taken out at a whim. To be sure, that didn鈥檛 work because Trump tends to dismiss or misunderstand the motivations of authoritarian leaders, be it Khamenei, Vladimir Putin or Xi Jinping.

For European allies, it began with the earlier Trumpian narrative that Russia might be a threat and a problem for Europe, but not so for the US. Therefore, America can walk away from NATO while Europe cannot. Hence the effective threat to spend more or be left defenceless. By agreeing to spend more, European countries are now more assured that Trump will honour his collective security commitments.

The lessons for Australia should be clear. Trump gives more to allies that do more, spend more, and take more risks. Passivity is the danger, and free riding will be ruthlessly punished. Trump is threatening Spain with increased tariffs after the latter demanded and received an exemption from the 5 per cent NATO target. His administration will eventually turn its attention to us, probably after the AUKUS review is completed.

When it comes to strategic and defence issues, pointing to the importance of our geography in strategic terms as a reason why Australia ought to get a pass on increased defence spending will be scorned. Trump will simply respond that real estate, even in prime locations, has lower value without sufficient investment. It requires far more than the Albanese government is currently prepared to spend on defence.

The alliance with the US under Trump can thrive in unique ways or wither dangerously quickly. The Albanese government has significant agency in determining which it will be.