On Tuesday 24 February 2026, John McCarthy AO FAIIA, former Australian Ambassador to the US, addressed the Institute on the future of Australia\u2019s defence alliance with the United States in light of the shift in its foreign policy under President Trump.
Based on his recent observations including a visit to Greenland, McCarthy saw the Trump administration\u2019s overtures to acquire Greenland as \u201ca diagnostic lens for a new world\u201d. He argued that the Greenland proposal represents a structural atrophy in international norms. He suggested that if the US employs coercive measures against a democratic NATO ally like Denmark over territory, it forfeits the moral authority to challenge Russian revisionism in Ukraine or Chinese posturing toward Taiwan. Such moral equivalence forces Australia to decide: critique an unpredictable ally or stay silent?
In McCarthy\u2019s analysis, a historical imbalance can be identified in Australia\u2019s post-war foreign policy, which has traditionally rested on three distinct prongs: the US alliance, regional engagement, and efforts in multilateral frameworks. He argued that a pathologically high reliance on the first prong has led to a dangerous atrophy in the others. He further deconstructed the alliance between the US and its historical allies into its constituent drivers:
interests, trust, and values. He argued that while mutual interests traditionally sustained alliances, even interest-based alignment (such as countering Russia) has vacillated under the Trump administration. Regarding trust, McCarthy highlighted how it is now difficult to see a strong linkage between the US and key allies, and he noted that while Australia remains less vocal about this erosion, internal doubts are profound. Regarding values, it is evident there is now a huge chasm between the Trump administration\u2019s conduct and the shared Western value system, undermining the “common front” essential for global stability.
Nonetheless, McCarthy warned against conflating disturbing American conduct with a weakening of American power. The US remains the unrivalled titan of material hegemony, especially when it comes to military power, with the US army exceeding the size of the next five nations combined, including China and Russia. Because of this overwhelming material reality, McCarthy identified a strategic paralysis: Australia cannot simply “walk away” from the alliance \u2013 even as the partner\u2019s reliability collapses, the alliance remains a material necessity.<\/p>\n\n\n\n
McCarthy addressed Canada\u2019s stance, deeming the \u201cCarney Model\u201d of open defiance untenable for Australia. Unlike Canada (an inherent security free-rider), Australia\u2019s geographical distance from the immediate Amrican sphere demands greater diplomatic subservience. While Canada is free from existential threat perceptions and faces high domestic pressure to defy Trump, Australia sees a pervasive \u201cChina threat\u201d which creates significant pressure to maintain the US alliance. McCarthy ultimately viewed with scepticism the proposals of \u201cmiddle power coalitions\u201d or regional partnerships (Japan, India, South Korea, even Indonesia) as total substitutes for US military weight. He characterised these options as useful for specific issues but insufficient for existential deterrence.
To move beyond a reactive policy of \u201chope\u201d and \u201cmuddling through\u201d McCarthy proposed a new white paper on foreign policy, invoking the precedent of the 1983 review under Foreign Minister Hayden, as a necessary exercise in strategic courage. Such a document would compel inter-agency cooperation to define the national interest holistically, potentially downplaying the alliance\u2019s relative significance in favour of regional pragmatism. McCarthy critiqued the current political class for its strategic inertia in addressing uncertainties regarding the alliance, unwilling to “rock the boat” despite a radically altered landscape.
In discussion with the audience, a question arose about pursuing a closer relationship with the EU, given shared values and a common commitment to multilateralism amid Trump\u2019s behaviour. McCarthy acknowledged that Australia had neglected Europe for decades. He argued that Australia should engage more with European powers in response to Trump\u2019s conduct and to preserve the post-WWII multilateral system.
Questioned on the argument that the US is drifting away under Trump, signalling a shift toward a new \u201cMonroe Doctrine\u201d effectively granting Asia to China, McCarthy agreed. He noted a US reluctance for major interventions dating back to Iraq and Afghanistan; Trump was no aberration. Even with future Democratic administrations after Trump, McCarthy said, US foreign policy has to some degree changed forever.
Regarding Indonesia\u2019s direction under Prabowo Subianto\u2019s presidencey, McCarthy said Prabowo seeks visibility and aligns easily with Trump but would maintain Indonesia\u2019s non-aligned stance, balancing the US and China for advantage.
Asked if Australia should seek a \u201cfourth option\u201d beyond the alliance, the region, ormultilateralism, McCarthy recalled the Keating-Evans era but said those moves had flourished in a more flexible unipolar moment. Today, he argued, the three existing prongsremain the only realistic foundation, though Australia over-relied on the alliance at the cost of regional and multilateral balance. When asked what parts of the multilateral system Australia should salvage, McCarthy was pessimistic about the UN\u2019s political side but urged focus on \u201cfunctional\u201d agencies (WHO, FAO, the World Bank, IMF) that sustain global stability. On Australia\u2019s \u201ctransactional\u201d approach (as in the critical minerals deal) to sway Trump, McCarthy said values and interests inevitably mix. The deal had probably served to smooth AUKUS talks during Albanese\u2019s US visit. Deals, he said, are a crude yet necessary part of diplomacy with Washington today.<\/p>\n\n\n\n
On Canadian Prime Minister Mark Carney\u2019s claim that the rules-based order had always been a fiction, McCarthy dismissed this as a \u201cgood rhetorical line\u201d and rejected its premise. He argued that the rules-based order had worked effectively ever since World War II but has since become less effective: the rules-based order is \u201cnot the same today\u201d and its decline is undeniable.<\/p>\n\n\n\n
Speaker John McCarthy (right), AIIA NSW president Ian Lincoln (left) and intern Paolo Lini (centre)<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"_acf_changed":false},"categories":[],"tags":[],"class_list":["post-38045","nsw-news","type-nsw-news","status-publish","hentry"],"acf":[],"yoast_head":"\n
Report by Paolo Lini, AIIA NSW intern<\/em><\/p>\n\n\n\n![\"\"](\"https:\/\/www.internationalaffairs.org.au\/wp-content\/uploads\/Mccarthy.jpg\")
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