Officials and executives say that the U.S. still has controls on exports of sensitive defence products, which were relaxed last year for AUKUS partner Australia. This is a barrier to collaboration between defence industries on U.S. Virginia class sub production.

Richard Marles, the Defence Minister, said that whether or not the United States is able to overcome production delays and meet U.S. Navy goals will determine if Australia can purchase three Virginia-class nucleo powered submarines through AUKUS. Australia has a 2025 deadline for paying $2 billion out of $3 billion pledged by Australia to upgrade the U.S. sub industrial base.

Elon Musk’s Department of Government Efficiency was given the task by U.S. president Donald Trump to review Navy procurement. This executive order also mentions American-made components, and reduces regulations.

Slow progress has been made in bringing Australian companies into Virginia's U.S.-based supply chain.

In August, Australia, the United States, and Britain eliminated significant barriers to defence trade among AUKUS members. 70% of defense exports to Australia from the United States, which were previously subject to U.S. International Trafficking in Arms Regulations (ITAR), became licence-free.

Excluded Technology Lists, which cover advanced or sensitive defense areas, still require a lengthy licensing process.

Kylie Wright is the assistant secretary of defence industry for Australia's Department of Defence. She said that submarine technology is not included in the AUKUS exemption.

A spokesperson for the Australian Submarine Agency said that it is working with other solutions.

The spokesperson said that the key to AUKUS' success is the seamless transfer of information and technology between Australia and the U.S.

Executives of the company said that restrictions on the transfer of information about nuclear submarines mean Australian component makers can't bid to work in U.S. Naval shipyards even if they could supply parts desperately needed.

Honeywell, the U.S. Navy and Huntington Ingalls Industries are helping a few Australian companies to qualify for subcontracts in Virginia under pilot programmes focusing on information security.

Veem, a Western Australian defence contractor, expects it will take a full year to complete the U.S. Security Process that will enable it to exchange data with HII.

Trevor Raman, Veem's chief executive officer, said: "The components that they are having difficulty building are components we build."

He said that the most important thing we can do is to prove that we have the right systems in place that will secure the information so that it doesn't fall into enemy hands.

Raman is not concerned by Trump's focus on the Made in America aspect of his shipbuilding review.

He said: "The truth is that what we do is highly specialised, and requires a high level of skills." "They will have to rely upon some outside help."

HII declined comment.

Last week, Admiral Samuel Paparo of the U.S. Indo-Pacific Command told the Senate Armed Services Committee that the greatest advantage AUKUS provided the United States is the ability to operate U.S.-commanded subs from Australia's Indian Ocean Port starting in 2027.

He said: "It is a direct shot to the South China Sea." Reporting by Kirsty Wantham. Gerry Doyle edited the article.

(source: Reuters)