President Joe Biden will travel to San Diego on Monday to announce Australia’s purchase of nuclear-powered submarines to modernize its fleet and help the United States counter China’s growing influence in the Indo-Pacific.
Before boarding Air Force 1, the president made brief remarks, hoping to reassure Americans that “American banking is safe” after Silicon Valley Bank collapsed on Friday.
Shortly after Biden’s departure, the New York Stock Exchange opened and promptly halted trading in three banks: First Republic Bank, Western Alliance and PacWest after shares fell 75 percent.
Financial jitters continue to overshadow international settlement as Wall Street scrambles to figure out what’s driving multiple bank failures in the US.
President Joe Biden leaves for San Diego, California to meet with Australian Prime Minister Anthony Albanese and UK Prime Minister Rishi Sunak to announce a nuclear submarine deal.
Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on March 13, 2023 in New York City. Shortly after Biden’s departure for California, US stocks plunged on Monday amid concerns about the banking system following the collapse of Silicon Valley Bank and others.
San Diego is Biden’s first stop on a three-day trip to California and Nevada. He will speak about gun violence prevention in Monterey Park, California, and his plans to reduce prescription drug costs in Las Vegas.
The trip will include fundraising stops as Biden steps up his political activities ahead of an expected announcement next month that he will seek re-election in 2024.
Landing in San Diego, home to the US Pacific Fleet, Biden will meet Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak, two of America’s closest allies, as part of the 18 month nuclear partnership known by the acronym AUKUS which stands for AUstralia, UK, USA.
The consortium, announced in 2021, paved the way for Australia’s access to nuclear-powered submarines, which are stealthier and more capable than conventionally powered ships, as a counterbalance to China’s military buildup.
Ahead of the trilateral meeting, Sunak announced he will increase UK military funding by 5 billion pounds ($6 billion) over the next two years in response to Russia’s invasion of Ukraine and Chinese aggression.
The AUKUS partnership was announced in 2021, but Monday’s announcement will cement the details. Australia is buying up to five Virginia-class ships as part of the deal, according to the Associated Press.
China opposes the deal, arguing that it violates the Nuclear Non-Proliferation Treaty, which prohibits the transfer of nuclear weapons materials from a nuclear-weapon state to a non-nuclear-weapon state.
Australian officials respond that they are working to acquire nuclear-powered and non-nuclear-powered submarines.
Biden will also hold bilateral meetings with the Albanese and Sunak in San Diego.
Australia to buy up to five Virginia-class submarines, ahead of Virginia-class USS North Dakota
British Prime Minister Rishi Sunak, left, speaks with Australian Prime Minister Anthony Albanese at the Lionfish seafood restaurant in San Diego on Sunday.
British Prime Minister Rishi Sunak speaks to the British press as he travels with him to San Diego.
The Silicon Valley Bank SVB logo is displayed at its German branch in Frankfurt, Germany, as concerns grow over possible international financial contagion.
Signature Bank was absorbed by the New York State agencies on Friday, March 12, 2023.
The three parties have been working to provide Australia with a fleet of nuclear-powered submarines, given restrictions on technology transfer and classified nuclear processes.
On the way to the United States, Sunak He said China ‘presents an epoch-defining challenge for us and for the global order. It is a regime that is increasingly authoritarian at home and assertive abroad, and has a desire to reform the world order.”
But, he added, “China cannot be ignored” given the size of its economy.
“It is right to engage with China on issues where we can find common ground and make a difference, for example climate change, global health, macroeconomic stability,” he said.
“That is the correct approach while being very strong in defending our values and our interests.”
The secretly negotiated AUKUS deal included the Australian government’s cancellation of a $66 billion contract for a fleet of French-built conventional submarines, sparking a diplomatic spat within the Western alliance that took months to mend.
French President Emmanuel Macron recalled his ambassador from Washington in September 2021 and then met Biden in Italy during a G20 so the two could make peace.
Biden called Macron on Tuesday, but a reading of the White House call did not say whether the AUKUS deal emerged.
The two leaders discussed the growing Chinese influence in the South Pacific, an issue that also worries Australia.