Australia and the emerging nuclear order in Northeast Asia

Executive summary

• Japan and South Korea are facing increasing insecurity due to the growing conventional and nuclear capabilities of China and North Korea coupled with questions around the ongoing durability of US extended deterrence.
• Since the 1960s, both Japan and South Korea have pursued a latent nuclear weapons capability to compel stronger extended deterrence guarantees from the United States while also providing a hedge against US abandonment. Evidence suggests a continuation of this policy through developments in fissile material production and missile capabilities.
• Given the growing threat profiles of China and North Korea, questions around the ongoing durability of US extended deterrence, and Japan’s and South Korea’s growing (though still unexercised) technical capability for building nuclear weapons, there are three likely configurations of the regional nuclear order to 2040:
  • 'Nuclear horse-trading’: the US-Japan and US-South Korea dyads competitively negotiate adjustments to US extended deterrence that, from the US perspective, offset Japanese and South Korean demands for nuclear weapons acquisition; and, from the Japanese and South Korean perspectives, are sufficient to deter emerging threats from China and North Korea, for example the United States contributing to Japanese and South Korean conventional deterrence capabilities or upgrading facilities on Japanese and South Korean territory that could host American nuclear assets in the future.
  • ‘Nuclear sharing’: the United States redeploys tactical nuclear weapons (TNWs) to Japanese and/or South Korean territory to bolster deterrence against Chinese and North Korean attempts to alter the status quo; strengthen the durability of its regional extended deterrence commitments; and reduce demand in Tokyo and Seoul for an independent nuclear weapons capability.
  • ‘Nuclear proliferation’: Japan and South Korea leverage their advanced nuclear latency to pursue an independent nuclear deterrent.
• The present nuclear order in Northeast Asia most closely resembles nuclear horse-trading. This nuclear order is likely to prove durable to 2040 given the significant constraints that Japan and South Korea would face if they shifted to nuclear sharing or nuclear proliferation, including threats of retaliation from China, rancorous domestic politics, and risks of estrangement from the United States.
• However, a deteriorating regional balance of allied conventional and nuclear power means that alternative futures in which the United States redeploys tactical nuclear weapons to Northeast Asia cannot be discounted entirely, nor can the possibility of Japan and/or South Korea acquiring an independent nuclear weapons capability. Accordingly, Australia must consider the implications of, and prepare for both of these futures.
• Nuclear sharing will lower the threshold of nuclear use in Northeast Asia. This will require that Australia establishes defensive options against limited nuclear attacks by China or North Korea, which may use threats of such attacks on Australian interests to establish escalation control in a theatre nuclear conflict.
• Australia needs to be investing now in these defensive options, for example by continuing development of its long-range pre-emptive strike capabilities and national missile defence.

Introduction

Northeast Asia is in a state of flux. Whereas the region’s strategic environment was once dictated by the United States, which had clearcut military, political, and economic supremacy, Washington’s regional influence has been offset by the rise of China as a legitimate peer competitor and the ability of spoilers such as North Korea and Russia to thwart US regional objectives.¹ The emergence of this new, multipolar order in Northeast Asia has left US regional allies Japan and South Korea scrambling to craft effective national security strategies that manage the effects of relative US decline as they navigate their own troubled relationships with Beijing and Pyongyang.

Unsurprisingly, nuclear weapons have re-emerged as a critical axis in these evolving security relationships: China and North Korea are increasing their theatre and intercontinental nuclear strike capabilities; the United States is attempting to reconcile the growing nuclear strike capabilities of China and North Korea with its forward regional posture and extended deterrence commitments; and Japan and South Korea are considering how best to leverage US extended deterrence and their latent capability to produce nuclear weapons to offset growing insecurity in terms of China and North Korea. These developments constitute an ongoing evolution in the Northeast Asian nuclear order, both in terms of the distribution of nuclear weapons capabilities and how those capabilities are used by states in their respective pursuits of national security.

Any significant restructuring of security or economic relationships in Northeast Asia borne from changes to the regional nuclear order is likely to bear on Australia’s own strategic calculus.

These changes in the Northeast Asian nuclear order obviously have strategic implications for regional states across the domains of alliances, deterrence, and the balance of military power.² What’s perhaps less obvious is how change in the Northeast Asian nuclear order will reverberate across the wider Indo-Pacific. This is an especially pertinent consideration for Australia, the strategic interests of which are closely intertwined with Northeast Asia. Australia’s most consequential strategic partners and competitors are in Northeast Asia; Australia’s four largest trading partners are in Northeast Asia; and Australia is heavily invested in norms and institutions that are shaped by Northeast Asian international relations, including US extended deterrence, nuclear non-proliferation, and the rules-based international order. Any significant restructuring of security or economic relationships in Northeast Asia borne from changes to the regional nuclear order is likely to bear on Australia’s own strategic calculus.

In this report, I evaluate the future of the Northeast Asian nuclear order and its implications for Australia. Specifically, I argue that the nuclear order in Northeast Asia is currently defined by ‘nuclear horse-trading’ in which the US-Japan and US-South Korea dyads competitively negotiate adjustments to US extended deterrence that, from the US perspective, offset Japanese and South Korean demands for nuclear weapons acquisition; and, from the Japanese and South Korean perspectives, are sufficient to deter emerging threats from China and North Korea. While this form of US extended deterrence is likely to prove durable to 2040, a deteriorating regional balance of allied conventional and nuclear power means that alternative futures in which the United States re-deploys TNWs to Northeast Asia cannot be discounted entirely, nor can the possibility of Japan and/or South Korea acquiring an independent nuclear weapons capability. Both of these alternative strategic futures carry implications for Australia, in particular nuclear sharing, which will raise the risk to Australia of entrapment in regional nuclear conflicts.

In making this argument, this report proceeds in five stages. First, I describe the changing strategic environment in Northeast Asia emergent from the relative decline of US regional power, focusing specifically on the growing threat profiles of China and North Korea to Japan and South Korea, respectively. Second, I describe how, in response to their deteriorating strategic environments, both Japan and South Korea are maintaining a strategy of ‘nuclear latency’ (the unexercised ability to produce nuclear weapons), both to extract firmer security guarantees from Washington and to serve as a hedge against US abandonment. Third, given the growing threat profiles of China and North Korea, questions around the ongoing durability of US extended deterrence, and growing Japanese and South Korean nuclear latency, I describe three possible configurations of the regional nuclear order to 2040: nuclear horse-trading, nuclear sharing, and nuclear proliferation. Fourth, based on current strategic trends, I assess which of these candidate nuclear orders is most likely to prevail in Northeast Asia to 2040. And fifth, I assess the implications of changes in the Northeast Asian nuclear order for Australia.

The changing regional threat environment

The China threat and Japan

The first vector of the regional Chinese threat is conventional. The last ten years have seen a near-doubling of China’s defence spending,³ concentrated on major and ongoing investments in conventionally armed anti-access/area denial (A2/AD) capabilities, including modern attack submarines, fourth generation fighter aircraft, and, most significantly, its arsenal of thousands of short-, medium-, and intermediate-range ballistic missiles. Through the development of these capabilities, China has been able to establish a threat envelope that, according to Australian analysts, “poses a major threat to almost all American, allied and partner bases, airstrips, ports and military installations in the Western Pacific.”⁴ As a result, in a conventional contingency, China’s increasing A2/AD capabilities will be able to slow and diminish an initial response by the United States and its allies through precision strikes on the latter’s regional enabling infrastructure, granting Beijing the opportunity to secure its objectives and establish a fait accompli before a meaningful US-led response can be mounted.⁵ This assessment was reflected in the 2023 final report of the Congressional Commission on the Strategic Posture of the United States (US Strategic Posture Review), which stated that “China is rapidly expanding and modernizing its conventional forces — to include ballistic missile systems — posing an increasing threat to U.S. forces and Allies in Asia. By the 2030s China’s conventional military build-up could turn the conventional military balance in Asia against the United States and its Allies.”⁶

The increasing conventional threat posed by China is of particular concern to Japan, with Japan’s 2022 National Defence Strategy characterising China as “an unprecedented and the greatest strategic challenge in ensuring the peace and security of Japan.”⁷ Such views are shared by the Japanese public, with 2022 polling from the Pew Research Centre showing that 60 per cent of Japanese respondents viewed China’s military power as a “very serious” problem for their country, the highest percentage of any country surveyed.⁸ The primary Japanese concern is a Chinese conventional effort to seize territory in the Ryukyu island chain, in particular the Senkaku/Diaoyu Islands which China formally claims and which have, since the 2010s, been the target of sustained Chinese grey-zone warfare, including frequent incursions into the islands’ contiguous zone by Chinese patrol vessels, submarines, and frigates, as well as the deliberate ramming of a Japanese coastguard vessel in 2010.⁹ Chinese control of the Senkaku/Diaoyu Islands would be a critical blow for Japan strategically, as it would break the first island chain, thereby enhancing China’s ability to restrict Japanese access to critical trade routes in the East and South China Seas; economically, as it would compromise Japan’s access to the surrounding fish stocks and oil and gas fields; and symbolically, as it would demonstrate Japan’s inability to safeguard its sovereignty in the face of China’s rise as a de facto superpower.¹⁰

A formation of Dongfeng-41 intercontinental strategic nuclear missiles take part in a military parade celebrating the 70th anniversary of the founding of the People’s Republic of China in Beijing, October 2019.Source: Getty

Japan has also expressed concern regarding China’s end-game in Taiwan.¹¹ Since 2021, current and former Japanese leaders have been issuing unusually blunt statements regarding the need for the United States to recommit to Taiwan’s defence and the possibility of a Japanese intervention in a cross-Strait crisis,¹² likely reflecting growing concerns that China might soon attempt a reunification by force. Large portions of China’s A2/AD modernisation are directed at military contingencies involving Taiwan, and a Chinese invasion of Taiwan would be a major geostrategic problem for Japan, to the point that then Japanese Deputy Prime Minister Taro Aso declared in 2021 that it would constitute a “threat to Japan’s survival.”¹³ A Chinese invasion would risk entrapping Japan in a superpower conflict as China may horizontally escalate a conflict with Taiwan to attack US military bases in Japan; it would threaten the elimination of a de facto independent Taiwan, a generally favourable, if unofficial, political and economic ally of Tokyo; it would break the first island chain;¹⁴ and it would bring Chinese military forces perilously close to the contested Senkaku/Diaoyu Islands and, at least according to some Japanese analysts, offer Beijing a pretext for their seizure by force.¹⁵

The second vector of the Chinese threat is nuclear. As China’s primary strategic rival, the United States has historically enjoyed ‘nuclear superiority’ over Beijing, being able to reliably strike the Chinese homeland with nuclear weapons while also being able to defend against an equivalent Chinese attack through a combination of pre-emptive strikes on nuclear launch facilities and national missile defence (NMD). China is attempting to overcome US nuclear superiority and establish mutually assured destruction (MAD) — where an all out, arsenal-emptying nuclear war would lead to unacceptable damage on both sides — through a program of nuclear modernisation designed to enhance both the survivability (the ability of nuclear strike forces to survive pre-emptive strikes by an adversary) and penetration (the ability of nuclear strike forces to overcome the defences of an adversary) of its nuclear strike forces for targets in the continental US (CONUS). Chinese efforts to enhance survivability include the construction of over 300 hardened missile silos and deployment of new concealed and mobile nuclear delivery platforms such as road-mobile transport erector launchers (TELs) and nuclear-armed submarines (SSBNs). China’s efforts to enhance penetration include increasing its arsenal of nuclear warheads (projected to reach over 1,000 by 2030) and developing nuclear-capable hypersonic and cruise missile capabilities to overwhelm and evade, respectively, US NMD.¹⁶

From the Japanese perspective, should China establish MAD with the United States, the Chinese conventional threat to the Ryukyu Islands and Taiwan will be exacerbated in that China will be emboldened to more aggressively press its claims through conventional aggression, believing that, even in the context of conventional war with the United States, the United States will be restrained from major escalatory moves such as cross-border attacks on Chinese supply lines or missile batteries for fear of catalysing MAD. Of course, China would have just as much to lose from MAD, and thus isn’t likely to test US resolve through extreme provocations such as a ground invasion of Okinawa. However, if China can signal to the United States that their intervention in a conventional conflict over Taiwan or the Ryukyu Islands has a realistic chance of spiralling out of control into full-blown US-Chinese MAD, the United States will face pressures to limit the terms of such intervention to protect their homeland, giving Beijing greater latitude to seek piecemeal changes to the status quo while leaning on MAD to contain US conventional responses — commonly referred to as ‘salami-slicing tactics’ — leading to a long-term degradation of Japan’s geostrategic position.¹⁷

Japanese concerns about a constrained US response to conventional aggression by a nuclear-armed adversary were piqued by the Russian invasion of Ukraine which saw ... a hedged US response, for example in terms of Washington’s refusal to enforce a no-fly zone over Ukraine and initial refusal to provide Ukraine with fighter aircraft.

Japanese concerns about a constrained US response to conventional aggression by a nuclear-armed adversary were piqued by the Russian invasion of Ukraine which saw, what was considered by some, a hedged US response, for example in terms of Washington’s refusal to enforce a no-fly zone over Ukraine and initial refusal to provide Ukraine with fighter aircraft.¹⁸ While the United States remains outwardly steadfast in its extended deterrence commitments to Japan,¹⁹ and the absence of a formal security treaty between the United States and Ukraine (as with Japan) notwithstanding, some Japanese leaders took perceived US inaction in Ukraine as an omen of US vacillation in response to aggression against Japan. For example, in November 2022, former Japanese Joint Chiefs of Staff Kawano Katsutoshi stated that “Japan saw the United States not making any moves … This was burned into the minds of Japanese people after the Ukraine war. I can’t pretend it didn’t happen. Because I’ve already seen it … there is no way that any Japanese can say with certainty that the United States will definitely provide a nuclear umbrella.”’²⁰ Similarly, 2024 expert polling conducted by the United States Studies Centre found that only 15 per cent of Japanese respondents were “very confident” in US extended deterrent commitments to Japan (compared with 54 per cent of US respondents).²¹

Questions around the durability of US extended deterrence notwithstanding, Japan still views its alliance with the United States as foundational to its national security. Japan’s 2022 National Security Strategy, for example, describes the US-Japan alliance as “indispensable” for “the security of Japan” and commits Japan to “Deepening Security Cooperation with the United States.” This includes:

efforts to coordinate bilateral operations including cross-domain operations and the use of Japan’s counterstrike capabilities, improve interoperability, deepen cooperation in the cyber, space and other fields, advance equipment and technological cooperation that capitalizes on advanced technologies, carry out more advanced and practical bilateral exercises, conduct joint Flexible Deterrent Options (FDO), conduct joint intelligence, surveillance and reconnaissance (ISR) operations, and increase joint/shared use of Japanese and U.S. facilities.²²

Polling conducted by the Japanese Cabinet Office in 2022 also reveals popular support for the alliance, with 90 per cent of Japanese respondents viewing Japan’s alliance with the United States as “helpful” in contributing to the peace and security of Japan.²³

The North Korea threat and South Korea

The regional North Korean threat is nuclear, with its development of nuclear weapons capabilities proceeding along two axes. First, North Korea is developing a range of TNW options that are postured to attack regional US and allied military targets, including command-and-control facilities, missile defence systems and airfields. These are primarily constituted by North Korea’s arsenal of nuclear-capable ground-to-ground short-, medium-, and intermediate-range cruise and ballistic missiles, although North Korea has recently expressed interest in diversifying its delivery systems to include submarine-launched ballistic missiles (SLBMs) and even nuclear-armed torpedoes.²⁴ North Korea is also developing its strategic nuclear strike capability for the CONUS constituted primarily by its Hwasong-14, 15, 17, and 18 intercontinental ballistic missiles (ICBMs).

A man watches a television screen showing a news broadcast with an image of a North Korean military parade held in Pyongyang, February 2023.Source: Getty

These tactical and strategic nuclear capabilities are intended to operate together in what’s referred to as an ‘asymmetric escalation’ deterrence posture in which North Korea deters US-led conventional operations by threatening to respond with escalation to tactical nuclear use. North Korean threats of tactical nuclear use in response to US conventional operations provide deterrence both because tactical nuclear use would be militarily devastating in its own right, but also because tactical nuclear use would cross the nuclear threshold and thus pose a serious risk of triggering escalation to a strategic nuclear exchange which could place CONUS at risk of North Korea’s ICBMs.²⁵ Thus, the United States would, theoretically, be forced to exercise restraint in deploying its vastly superior conventional forces in a conventional contingency involving North Korea to avoid touching off an escalation chain that begins with North Korean tactical nuclear strikes in theatre and culminates in North Korean nuclear strikes against CONUS.

North Korea’s asymmetric escalation deterrence posture was formalised in its 2022 ‘State Policy on the Nuclear Forces’ which stipulated five conditions of nuclear use, all of which are not only conceivable, but likely to arise in a major conventional conflict on the peninsula. These conditions included attacks against “important strategic objects of the state,” attacks on the state leadership or nuclear command and control, or a deterioration in North Korean conventional forces requiring Pyongyang to “tak[e] the initiative” to repel advancing forces.²⁶

Underpinning this change in nuclear posture, recent years have seen significant gains in North Korea’s tactical and strategic nuclear strike capabilities, both quantitatively and qualitatively in terms of enhanced survivability and penetration. These include the testing of new intermediate-range ballistic missile (IRBM) systems with manoeuvring re-entry and hypersonic glide vehicle payloads,²⁷ and three successful tests of its Hwasong-18 road-mobile, solid fuel ICBM.²⁸ While North Korea’s nuclear-capable missile systems have uneven performance and material capability gaps remain, for example inadequate fissile material production to support a scaled TNW arsenal and lack of a proven ICBM re-entry vehicle²⁹ — Pyongyang has demonstrated both the will and means to overcome such barriers, meaning that a functional North Korean asymmetric escalation deterrence posture constituted by credible tactical and strategic nuclear strike capabilities is, at its current trajectory, certainly possible.

Underpinning this change in nuclear posture, recent years have seen significant gains in North Korea’s tactical and strategic nuclear strike capabilities, both quantitatively and qualitatively in terms of enhanced survivability and penetration.

A scenario in which North Korea continues to see significant gains in its tactical and strategic nuclear strike capabilities poses enormous security challenges for South Korea, leading South Korea’s 2023 National Security Strategy to label “North Korea’s continued advancement of its nuclear and other weapons of mass destruction (WMD) capabilities” as its “most pressing” security challenge.³⁰ First, hiding behind a shield of nuclear deterrence, North Korea is likely to scale up in both frequency and intensity its already-extensive practice of military provocations against South Korea, ranging from nuclear and missile tests to limited incursions across the South Korean border with artillery fire or unmanned aerial vehicles to the 2010 sinking of a South Korean corvette.³¹ From the North Korean perspective, such provocations can be used to extract concessions — from aid to sanctions relief to military demobilisation — while also scoring political points at home.

Second, a rapidly expanding nuclear arsenal coupled with inchoate command and control, vague conditions of nuclear use, and a population that has been charged by its supreme leadership with “completely occupying, subjugating and reclaiming the ROK [Republic of Korea]”³² presents several fault lines for miscalculation or inadvertent nuclear use, raising the risk of nuclear use against South Korea.³³

And third, as in the case with China, functional North Korean strategic deterrence of the United States will theoretically constrain Washington’s responses to North Korean aggression against South Korea as the United States will be forced to weigh any intervention in support of its treaty ally with its need to safeguard CONUS from North Korean nuclear strikes, leaving South Korea more vulnerable to North Korean attempts to revise the status quo. Over time, this dilemma risks driving a wedge between South Korea and the United States by convincing firstly the United States that a defence pact with South Korea is prohibitively risky; and secondly South Korea that the United States is unable to provide for its security. Indeed, while the United States has continuously reaffirmed its extended deterrence commitments to South Korea,³⁴ questions regarding the ongoing durability of US extended deterrence are not uncommon in South Korea. In January 2023, for example, South Korean President Yoon Suk-yeol stated that the United States was “falling short of convincing” South Korea of the credibility of extended deterrence.³⁵ And January 2023 polling from Hankook Ilbo found that only 36.7 per cent of respondents believed that the United States would “support South Korea unconditionally” were “South and North Korea [to] clash militarily,” despite treaty commitments and still-expanding security cooperation between the two states.³⁶ (Though it should be noted that South Korean confidence in US extended deterrence appears to have markedly improved following the introduction of a suite of US extended deterrence commitments to South Korea formalised in the April 2023 Washington Declaration, discussed further below.)

As with Japan, and despite questions around the durability of US extended deterrence, South Korea still views its alliance with the United States to be foundational to its national security. South Korea’s 2022 Defense White Paper, for example, touts the alliance as “the bedrock of peace, security, and prosperity for the Korean peninsula” and commits South Korea to increase “bilateral defense cooperation ... in domains including space, cyberspace, and defense technology, and industry.”³⁷ And 2023 polling from Gallup Korea showed that 92 per cent of Korean respondents viewed the alliance with the United States as “important,” with a further 54 per cent responding that the alliance should be “continuously strengthened.”³⁸

Regional nuclear latency

Given the security challenges of Chinese conventional and nuclear weapons development, North Korean gains in its nuclear strike capabilities, and the resultant questions around the durability of US extended deterrence, both Japan and South Korea are reforming their respective approaches to national security, including increasing defence budgets,³⁹ establishing new collective security arrangements,⁴⁰ and developing and procuring advanced conventional military systems.⁴¹ Importantly, both states are also leveraging a fifth tool in their national security toolboxes: nuclear latency.

Nuclear latency refers to a non-nuclear state’s capability for producing both a nuclear bomb and its means of delivery. Non-nuclear states that have the requisite technologies, materials, infrastructure, and expertise for, for example, fissile material production, metallurgy, and missile fabrication are able to rapidly assemble a nuclear weapons capability if the political decision to do so is made and thus are said to have achieved nuclear latency.⁴² Both Japan and South Korea already possess a relatively high level of nuclear latency due to their advanced civil nuclear and engineering industries, with estimates of a South Korean nuclear ‘breakout’ time ranging from one and a half to two years⁴³ and estimates of a Japanese breakout time ranging from two years to just “months.”⁴⁴

Tokyo and Seoul can exploit this international interest in keeping them non-nuclear by threatening to ‘activate’ their latent nuclear weapons capabilities and acquire the bomb unless security concessions are made.

The strategic logic of nuclear latency for Japan and South Korea is two-fold. First, nuclear latency offers both states coercive leverage over others. There are states that have an interest in Japan and/or South Korea not acquiring an independent nuclear weapons capability, for example China and North Korea, which want Japan and South Korea to remain non-nuclear to maintain a favourable balance of regional nuclear power; and the United States, which wants Japan and South Korea to remain non-nuclear to maintain regional stability and prevent the erosion of the international non-proliferation regime.⁴⁵ Tokyo and Seoul can exploit this international interest in keeping them non-nuclear by threatening to ‘activate’ their latent nuclear weapons capabilities and acquire the bomb unless security concessions are made. Indeed, Japan has an established practice of such coercive use of its nuclear latency dating back to the 1960s when Japanese Prime Minister Eisaku Sato used the threat of nuclear weapons acquisition to compel the Nixon Administration to return Okinawa to Japan on favourable terms.⁴⁶ This tactic has also been deployed by South Korea, for example in 1975 when the government of Park Chung-hee used the purchase of a nuclear reactor and plutonium processing facility to pressure the United States to commit to stationing ground troops in South Korea following an earlier withdrawal of a division of US forces.⁴⁷

The second strategic benefit of nuclear latency is that, if such coercive measures fail and security rapidly deteriorates, nuclear latency gives states the option of rapid nuclear weapons acquisition. That is, in a moment of acute insecurity — for example abandonment by the United States or a Chinese invasion of Taiwan — a high level of nuclear latency would allow Japan or South Korea to rapidly assemble a rudimentary nuclear deterrent that it could use to re-establish a measure of security from external threats.⁴⁸

While nuclear latency is not a new strategic tool of either state — as shown above, the coercive use of nuclear latency in these states dates back to the 1960s and 70s — there are indicators that Japan and South Korea are, in this period of growing insecurity, doubling down on the strategic logic of nuclear latency by further building up their latent nuclear weapons capabilities.

Japan

Japan is investing heavily in its fissile material production capacity. Fissile material is an essential component of a nuclear bomb, functioning either as the primary explosive charge in a nuclear fission bomb or as a primer for a two-stage thermonuclear bomb. The two most common pathways to fissile material are through uranium enrichment and plutonium reprocessing: Japan is currently increasing its capacity for both.

In terms of uranium enrichment, Japan is reportedly upgrading its only uranium enrichment cascade at the Rokkasho nuclear complex to more than triple its capacity from 450 to 1,500 tonnes of separative work units per year, sufficient for producing enough weapons-grade uranium — or uranium enriched to >90 per cent of the fissile uranium-235 (U-235) isotope — for 350 nuclear bombs.⁴⁹ While uranium enrichment (to lower levels of two to five per cent U-235 has legitimate civilian applications in the production of nuclear reactor fuel, with Japan currently operating 33 nuclear reactors nation-wide,⁵⁰ from 2011 Japan effectively ceased indigenous production of low-enriched uranium and instead turned to international markets for its reactor fuel supply.⁵¹ The decline in the Japanese production of indigenous, low-enriched uranium raises questions as to the logic of upgrading the Rokkasho enrichment cascade, suggesting that strategic, in addition to commercial, motives may be at play.

Japan is also increasing its plutonium reprocessing capacity through its continuing development of the Rokkasho Reprocessing Plant, also at the Rokkasho nuclear complex, Japan’s first commercial nuclear fuel reprocessing facility that would be capable of separating from spent nuclear fuel six tons of plutonium annually, enough for 750 nuclear bombs. While Rokkasho’s plutonium separation capability has been justified by Japanese authorities on the need to procure plutonium for the creation of fuel for mixed oxide (MOX) reactors — MOX fuel being a mix of plutonium and depleted uranium⁵² — the economics of indigenous Japanese plutonium separation, as with uranium enrichment, appear tenuous. This is due to the reprocessing plant’s ballooning costs, limited demand for MOX fuel in Japan, and Japan’s already sizeable plutonium stockpile (approximately 45 tonnes)⁵³ from plutonium separation that it had previously outsourced to the UK and France.⁵⁴ This uneconomical commitment to plutonium separation suggests that, as with enriched uranium, Japan is motivated by strategic, in addition to commercial motives.

In addition to developing its fissile material production capabilities, Japan is developing delivery systems for a latent nuclear weapons capability through major investments in its indigenous missile capabilities.

In addition to developing its fissile material production capabilities, Japan is developing delivery systems for a latent nuclear weapons capability through major investments in its indigenous missile capabilities. Japan has long had a strong technological and industrial base for the development of ballistic missiles due to its advanced space launch program (space launch vehicles sharing many of the same core technologies as ballistic missiles),⁵⁵ though it had historically refrained from outwardly militarising this capability. This changed in December 2022 with the release of the Japanese National Security Strategy which, citing enhanced missile threats from China and North Korea, mandated a missile-based “counterstrike” capability.⁵⁶ By April 2023, Japan’s Ministry of Defence had signed US$2.8 billion worth of contracts for the indigenous development of long-range missiles capable of striking targets in China and North Korea.⁵⁷ While Tokyo is framing the development of these capabilities as contributing to a conventional counterstrike capability consistent with the National Security Strategy, in the event of a Japanese nuclear breakout these capabilities could be adapted to support nuclear warheads, providing Japan with a latent nuclear strike capability for targets in China and North Korea.⁵⁸

South Korea

While South Korea has a relatively high degree of nuclear latency, one notable barrier to an independent nuclear weapons production capability is its lack of a commercial-scale fissile material production capability. While South Korea has made multiple attempts to procure uranium enrichment and plutonium reprocessing capabilities dating back to 1975, these moves have consistently been rebuffed by the United States, ostensibly on non-proliferation grounds.⁵⁹ Despite consistent US stonewalling on the fissile material issue, in 2011 South Korea was able to negotiate a joint study with the United States of an experimental, proliferation-resistant method for plutonium reprocessing known as pyroprocessing.⁶⁰

While South Korea has a relatively high degree of nuclear latency, one notable barrier to an independent nuclear weapons production capability is its lack of a commercial-scale fissile material production capability.

South Korea remains heavily invested in pyroprocessing, with Korea’s Nuclear Energy Promotion Commission in 2021 committing to continued R&D and consideration of the commercialisation of pyroprocessing technologies.⁶¹ South Korea justifies this ongoing interest in pyroprocessing on its potential utility in nuclear waste management. However, the relative inefficiency of pyroprocessing in fuel management coupled with recent reporting of lower-than-expected proliferation-resistance of pyroprocessing products suggests that South Korea’s ongoing commitment to pyroprocessing is, in part, motivated by the desire to establish an independent path to fissile material production in the face of US stonewalling on traditional fissile material production methods.⁶²

As with Japan, South Korea has also undertaken recent development of its missile capabilities, strengthening its latent nuclear weapons delivery system. In May 2021, the Biden Administration lifted US-imposed restrictions on the range and payload capabilities of South Korea’s missile force.⁶³ Since then, South Korea has seen rapid gains in its ballistic missile capabilities, including South Korea’s first successful SLBM test in September 2021 (making South Korea the only state with SLBM capabilities to not also possess nuclear weapons) as well as its first successful test of a solid-propellant space-launch vehicle in December 2022.⁶⁴ Recent analysis by Brewer, Dalton, and Jones suggests that South Korea could now possess as many as “nine different missile systems technically capable of carrying nuclear weapons.”⁶⁵

Further, in July 2022, the South Korean Ministry of National Defence announced the establishment of a new “strategic command” under the direction of the Joint Chiefs of Staff to coordinate South Korea’s “substantive response and deterrence capability,” including coordination of strategic assets such as its F-35A fighter jets, ballistic missile submarines, and its surface-to-surface Hyunmoo missile systems.⁶⁶ This strategic command was initially pitched as a coordinating body for South Korea’s emerging Three Axis defence strategy, which includes South Korea’s North Korea-centric pre-emptive and retaliatory strike capabilities. However, this system also provides a “bureaucratic foundation that could cover some of the requirements for operationalizing a nuclear weapons program.”⁶⁷ That is, the existence of a central command for strategic weapons systems would provide a strong base for integrating a future nuclear deterrent into South Korean force structures and doctrine at speed. In this sense, Seoul’s new, conventionally oriented strategic command could also be seen as South Korea establishing a latent command and control system for a nuclear deterrent.

Candidate nuclear orders

Japan’s and South Korea’s respective strategic environments are being shaped by three key factors: multipolarity in Northeast Asia characterised by the relative decline of US power and growing threat profiles of China and North Korea; questions around the ongoing durability of US extended deterrence; and growing Japanese and South Korean nuclear latency to extract firmer security guarantees from Washington and to serve as a hedge against US abandonment. How the United States, Japan, and South Korea manage these interconnected challenges will shape the regional nuclear order in the years to come. In the following sections, I present three candidate regional nuclear orders to 2040: nuclear horse-trading, nuclear sharing, and nuclear proliferation.

Nuclear horse-trading

In this first candidate nuclear order, as the Chinese-North Korean threat rises and the ongoing durability of US extended deterrence is challenged, Japan and South Korea will push for stronger US extended deterrence commitments using the implicit threat of nuclear weapons acquisition as leverage. For Tokyo and Seoul, the goal will be to strengthen regional deterrence by gaining US commitments that lock the latter into robust responses to any Chinese-North Korean attempts to alter the status quo. At the same time, Washington, conscious of the growing nuclear risk to the US homeland, will want to maintain the flexibility to limit involvement in allied responses to Chinese-North Korean regional aggression.

The result will be an ongoing process of ‘nuclear horse-trading’ in which Japan, South Korea and the United States competitively negotiate US extended deterrence commitments that: firstly, from the US perspective, provide just enough extended deterrence guarantees to offset the Japanese and South Korean demand for nuclear weapons acquisition without imposing major nuclear escalation risks; and secondly, from the Japanese and South Korean perspectives, are sufficiently durable to deter Chinese-North Korean attempts to alter the status quo. In this system of carefully calibrated extended deterrence commitments, Japan and South Korea are likely to continue to bolster their nuclear latency to increase leverage over the United States while shrewdly avoiding any overt signs of weaponisation that might torpedo negotiations.

This type of nuclear horse-trading is already evident in the US-South Korea relationship. Since 2022, South Korea has been placing pressure on the United States to bolster extended deterrence commitments using the implicit threat of a nuclear breakout as leverage. Specifically, senior South Korean officials have publicly mooted or outright advocated for South Korean nuclear weapons acquisition, including influential mayors,⁶⁸ senior members of the ruling People Power Party,⁶⁹ and even President Yoon,⁷⁰ making it the first time a sitting South Korean President had publicly raised nuclear weapons acquisition since the 1970s.⁷¹ While such statements may have been made partly for domestic political purposes, with popular support for indigenous South Korean nuclear weapons development now as high as 71 per cent according to recent polling from the Chicago Council on Global Affairs,⁷² it’s highly likely that they were also designed to place greater pressure on Washington to bolster extended nuclear deterrence commitments.

Washington has responded with new extended deterrence commitments. First, it has acceded to multiple consultative bodies on extended deterrence (Box 1) which, while not granting Seoul independent decision-making powers regarding the deployment, planning, doctrine, or use of US assets in the defence of Korea, do provide a forum for Seoul to articulate interests, propose new operating concepts, and shape US thinking across these domains. And second, it has enhanced its forward posture on the peninsula, including through new forward deployments of strategic assets, notably carrier strike groups and nuclear-capable submarines;⁷³ as well as expanded joint exercises with South Korean forces.⁷⁴

Demonstrating the transactional nature of these US concessions consistent with the horse-trading thesis, they have been linked to South Korean non-proliferation commitments. For example, the Washington Declaration includes in its third paragraph a conspicuous South Korean commitment to nuclear non-proliferation:

The ROK has full confidence in U.S. extended deterrence commitments and recognizes the importance, necessity, and benefit of its enduring reliance on the U.S. nuclear deterrent … President Yoon reaffirmed the ROK’s longstanding commitment to its obligations under the Nuclear Non-proliferation Treaty as the cornerstone of the global non-proliferation regime as well as to the U.S.-ROK Agreement for Cooperation Concerning Peaceful Uses of Nuclear Energy.⁸³

Also consistent with the horse-trading thesis, the United States has clearly conceived ‘red lines’ in its extended deterrence commitments to South Korea that it is reluctant to cross, ostensibly to minimise nuclear escalation risks. For example, the United States recently ruled out joint nuclear exercises with South Korea.⁸⁴ Also, the Washington Declaration does not commit the United States to a nuclear response to a nuclear attack on South Korea by North Korea, instead opting for the more open-ended commitment of “a swift, overwhelming and decisive response.”⁸⁵ This almost certainly fell short of South Korean expectations. Indeed, in a follow-up press conference, South Korean President Yoon attempted to shoehorn US nuclear weapons into that commitment by declaring that: “Our two countries have agreed … to respond swiftly, overwhelmingly, and decisively using the full force of the alliance including the United States’ nuclear weapons.”⁸⁶ Overall, these recent US extended deterrence commitments to South Korea are material but, as expressed by Panda and Volpe, do not “fundamentally restructure [the United States’] security architecture with South Korea.” Instead, they constitute a series of “consolation prizes”⁸⁷ that are, from the US perspective, good enough to offset South Korean demand for nuclear weapons and, from the South Korean side, good enough for dealing with near-term threats from North Korea.

Nuclear sharing

In this second nuclear order, Washington, Tokyo, and Seoul, conscious of the deteriorating balance of regional power and the attendant risks of Chinese and North Korean attempts to alter the status quo, will take decisive action to bolster regional deterrence by forward-deploying US TNWs to Northeast Asia, i.e. ‘nuclear sharing.’⁸⁸ The United States would almost certainly retain ultimate authority over the actual use of these assets while the role for the host nation could vary, ranging from passive hosting of US assets to joint planning and operations as is the case with US-led nuclear sharing with NATO.⁸⁹

The strategic logic of US nuclear sharing in Northeast Asia is two-fold. First, it would bolster deterrence against Chinese or North Korean attempts to alter the status quo through conventional military aggression by contributing to a US regional asymmetric escalation deterrence posture (as above) in which Chinese-North Korean conventional aggression would be stifled by the risk of triggering US tactical nuclear escalation. This has the potential to offset the United States’ deteriorating balance of conventional power as China in particular will be disincentivised from pressing a conventional advantage too hard for fear that the United States, with its back against the wall, will resort to the force-multiplying effects of tactical nuclear use to even the playing field.

A Japanese Maritime Self-Defense Force P-3C patrol plane flying over the disputed islets known as the Senkaku islands in Japan and Diaoyu islands in China, in the East China Sea, October 2011.Source: Getty

The second strategic dividend of nuclear sharing is that it would ameliorate the credibility challenges facing US extended deterrence to Japan and South Korea. The forward positioning of TNWs increases the likelihood of US tactical nuclear escalation in a regional contingency through two mechanisms. First, theatre deployment places TNWs within range of a Chinese-North Korean pre-emptive strike, creating a use-it-or-lose-it dilemma for US planners that rationalises early TNW use. And second, forward deployment allows US planners to maintain a forward posture for regional nuclear use, creating new tactical opportunities for, and lowering the operational costs of their use should the US conventional position deteriorate. By so increasing the likelihood of US nuclear escalation, nuclear sharing would alleviate Japanese/South Korean concerns that the United States would ‘cut and run’ in a regional contingency.

This was the two-fold logic that precipitated US deployments of tactical nuclear forces to Western Europe during the Cold War. Fearing a ground invasion by the numerically superior Soviet conventional forces, the United States deployed TNWs in the hope of nullifying the perceived Soviet conventional advantage by “trading manpower for firepower” while also signalling to Moscow its willingness to intervene in defence of its treaty allies.⁹⁰ The apparent success of this strategy, both in terms of maintaining the cohesion of the NATO alliance and deterring war in Europe, is likely why advocates of nuclear sharing in Japan and South Korea frequently invoke the NATO model.⁹¹

Nuclear proliferation

In this third nuclear order, Japan or South Korea, staring down major, if not existential security threats from China and North Korea, and feeling unable to resolve lingering questions regarding the ongoing durability of US extended deterrence, will leverage their nuclear latency to establish an independent nuclear deterrent. After one state (either Japan or South Korea) acquires the bomb, the other would likely follow, driven by nationalist sentiment demanding nuclear parity with the other and leveraging the other’s nuclearisation as a pretext for one’s own acquisition in spite of the international non-proliferation regime.⁹² The result will be nuclear multipolarity in Northeast Asia, with China, North Korea, the United States, Russia, and Japan and South Korea all being regional, nuclear-armed states.

To support nuclear weapons development in the short term, Japan would likely divert stocks of plutonium from its MOX fuel program for the rapid production of fissile bombs and mate these with its developing long-range strike capabilities. It will also likely continue to develop its reprocessing and enrichment capabilities at Rokkasho to maintain a durable, long-term path to fissile material as a hedge against international pushback to its nuclear weapons development. At the same time, South Korea is likely to rapidly assemble a commercial-scale fissile material production capability — either a standard plutonium uranium reduction extraction (PUREX) reprocessing facility for converting spent fuel from its reactors to plutonium, or, if its pyroprocessing capability has sufficiently advanced, a commercial-scale pyroprocessing facility with a covert facility for refining pure plutonium from the pyroprocessing product. With this plutonium, Seoul will be able to produce nuclear warheads for mating with its proven ground- and submarine-launched ballistic missiles.

Though the United States is likely to nominally oppose Japanese and South Korean nuclear proliferation on non-proliferation grounds, it is not likely to exert significant coercive pressure on either state to denuclearise, at least to the extent seen with North Korea.

Though the United States is likely to nominally oppose Japanese and South Korean nuclear proliferation on non-proliferation grounds, it is not likely to exert significant coercive pressure on either state to denuclearise, at least to the extent seen with North Korea.⁹³ Though the primary advocate, and arguably benefactor of the global non-proliferation regime,⁹⁴ the United States has historically been selective in its use of non-proliferation ‘sticks’ against strategically aligned states, including India, Israel, Pakistan, and South Africa.⁹⁵ Given the importance of Japan and South Korea in advancing US regional interests, especially in light of the approximately 80,000 US troops hosted across both states,⁹⁶ Washington will likely eschew unilateral sanctions against Japan and South Korea and veto any major sanctions put to the UN Security Council.⁹⁷ Instead, the United States is likely to shift its strategic focus in Japan and South Korea from non-proliferation to escalation control. That is, Washington’s overarching priority will change from preventing the spread of nuclear weapons to preventing the outbreak of nuclear war, for example by mediating regional disputes and counselling restraint in Japanese and/or South Korean nuclear posture.⁹⁸

Prospects for change in the regional nuclear order

Each nuclear order discussed above represents a coherent response by Japan, South Korea, and the United States to the interconnected challenges of growing threats from China and North Korea; questions around the ongoing durability of US extended deterrence; and increasing Japanese and South Korean nuclear latency.

Currently, the nuclear order in Northeast Asia most closely resembles nuclear horse-trading, with the United States and South Korea in particular competitively negotiating US extended deterrence commitments that, from the US perspective, offset South Korean demands for nuclear weapons acquisition and, from the South Korean perspective, are sufficient to deter near-term threats from North Korea. In this section, I identify the key variables likely to shape Japanese, South Korean, and US decision-making regarding the nuclear order in Northeast Asia, concluding that, while there is a compelling strategic case for a shift to nuclear sharing or nuclear proliferation, both futures face significant constraints, meaning that the United States, Japan, and South Korea are likely to exhaust all options for nuclear horse-trading before braving the hazards of nuclear sharing or nuclear proliferation.

US nuclear superiority

The terms ‘nuclear superiority’ and ‘nuclear inferiority’ refer to the uneven distribution of costs that may arise in a nuclear war.⁹⁹ In the event of an all-out, arsenal-emptying nuclear war between two nuclear-armed states, if one side can expect to (a) inflict unacceptable damage upon the other while (b) limiting the damage to itself to acceptable levels, it is said to have ‘nuclear superiority’ over the other. The United States has historically enjoyed nuclear superiority over both China and North Korea due to the relatively small and unsophisticated nuclear arsenals of China and North Korea coupled with the United States’ sizeable stockpile of advanced nuclear weapons and its advanced pre-emptive strike and NMD capabilities.

As detailed above, however, both China and North Korea are quantitatively and qualitatively strengthening their strategic nuclear strike capabilities for CONUS in an attempt to nullify the United States’ nuclear superiority and establish MAD, i.e. where nuclear war would lead to unacceptable damage on both sides. From the US perspective, China presents the most acute risk of establishing MAD by 2040. An influential RAND study modelled a 14 per cent survival rate of China’s nuclear arsenal following a counterforce US first strike in 2017.¹⁰⁰ Assuming that survival rate carries through to 2030, at which point China is projected to have “over 1,000 operational nuclear warheads, most of which will be fielded on systems capable of ranging the CONUS,”¹⁰¹ China will be able to launch a retaliatory strike of approximately 140 warheads at CONUS, more than enough to saturate the United States’ planned arsenal of 64 Ground-Based Midcourse Defense (GMD) interceptors,¹⁰² and this isn’t taking into account penetration aids, evasive flight trajectories, or GMD’s uneven testing performance.¹⁰³ It may be that the United States is planning to fill this gap through its SM-3 Block IIA interceptors, which have demonstrated potential for mid-course ICBM interception.¹⁰⁴ There are likely already hundreds of US Block IIAs deployed,¹⁰⁵ with strong potential to scale up given their relative cost effectiveness, being around one-quarter the unit cost of GMD’s Next Generation Interceptors.¹⁰⁶ However, Block IIAs remain undertested for the counter-ICBM mission and, along with existing GMD interceptors, are unsuitable for countering China’s growing nuclear-capable air- and sea-launched cruise missile and hypersonic capabilities.¹⁰⁷ These developments suggest the United States will struggle to maintain its nuclear superiority with respect to China to 2040.

The North Korean potential to establish MAD with the United States by 2040 is more uncertain. Assuming the United States would assign two interceptors per ICBM, and that North Korea’s ICBM arsenal would exhibit a comparable survival rate to China’s in the instance of a US first strike (a very generous assumption given the military technology and dispersion advantage enjoyed by China vis-à-vis North Korea), North Korea would need a minimum of 229 ICBMs to saturate US GMD.¹⁰⁸ While the exact size of North Korea’s ICBM arsenal is unknown, a military parade from 2023 showcased only 16 TEL-mounted ICBMs.¹⁰⁹ Assuming this approximates the actual size of North Korea’s ICBM arsenal, North Korea would require a 14-fold increase in its ICBM arsenal before it could begin posing a second-strike threat to the United States, and this is without considering the potential force-multiplying effects of Block IIAs. While North Korea has demonstrated an unusual ability to ‘pull rabbits out of hats’ when it comes to nuclear and missile development, and while the underperformance of US GMD may allow North Korea to achieve MAD with a sub-optimal deterrent, this would undoubtedly be an uphill battle for Pyongyang given the barriers to military procurement imposed by sanctions and a dilapidated economy.

The likely erosion of US nuclear superiority in Northeast Asia with respect to China, if not both China and North Korea, will likely constrain the US in its regional military engagements.

The likely erosion of US nuclear superiority in Northeast Asia with respect to China, if not both China and North Korea, will likely constrain the US in its regional military engagements. Specifically, the United States would likely be more cautious about any major regional interventions against China or North Korea due to fear of a Chinese-North Korean nuclear response culminating in unacceptable damage to the United States through nuclear strikes on CONUS.

In this scenario, nuclear horse-trading will likely lose its appeal in Japan and South Korea as whatever extended deterrence assurances the United States can offer through middling concessions such as consultative groups and joint exercises will not be sufficient, at least from the perspective of Tokyo and Seoul, to overcome the powerful disincentives for US intervention borne from MAD. Instead, nuclear sharing or nuclear proliferation will likely emerge as preferred nuclear orders in Tokyo and Seoul. Nuclear sharing would strengthen US extended deterrence by increasing the likelihood of US tactical nuclear escalation in the event of a major regional contingency as explained above. And nuclear proliferation sidesteps the issue of extended deterrence altogether by simply developing a nuclear deterrent under one’s own control.

Indeed, there is already a growing vein of support for nuclear sharing in particular in both Japan and South Korea, with senior leaders from both countries mooting or outright advocating for US nuclear sharing with their respective states.¹¹⁰ Furthermore, recent polling suggests moderate Japanese and South Korean public support for nuclear sharing, with 32 per cent and 57 per cent support, respectively.¹¹¹ The United States, for its part, has also indicated interest in the prospect of redeploying TNWs to Northeast Asia. For example, a 2024 publication by US Senate Armed Services Committee Ranking Member Senator Roger F. Wicker (R-Mississippi) advocated for “exploring … nuclear-sharing agreements in the Indo-Pacific and redeployment of U.S. tactical nuclear weapons on the Korean peninsula.”¹¹² And in 2023, the US Strategic Posture Review identified a “need for U.S. theater nuclear forces deployed or based in the Asia-Pacific theater” to “[p]rovide the President a range of militarily effective nuclear response options to deter or counter Chinese or Russian limited nuclear use in theater” and “[a]ddress allied concerns regarding extended deterrence.”¹¹³

The regional balance of conventional power

Even if the Japanese and South Korean concerns around the ongoing durability of US extended deterrence remain manageable through nuclear horse-trading, Tokyo and Seoul may still fear Chinese and North Korean attempts to alter the status quo. Specifically, should China or North Korea gain a conventional edge over the combined conventional capabilities of US-Japan or US-South Korea, respectively, the latter may lack the means to deter or defeat Chinese and North Korean conventional attempts to alter the status quo, for example a Chinese seizure of the Senkaku/Diaoyu Islands.

The prospect of North Korea gaining a conventional edge over the US-South Korea alliance before 2040 is unlikely due to the dilapidated state of the North’s conventional capabilities and economy. China, however, has shown significant potential to disrupt the regional conventional balance. On the back of China’s near-doubling of its military expenditure over the last ten years; the United States’ competing international commitments, particularly in Eastern Europe; congressional hurdles to timely and efficient defence spending; and the operational and logistical challenges of projecting power versus China’s ‘homecourt advantage,’ China is increasingly offsetting the United States’ long-held regional conventional supremacy.¹¹⁴ The abovementioned RAND study assessed that by 2017 China had achieved parity, if not advantage, with the United States across five of eight domains of conventional warfare in terms of a Taiwan contingency, and was making ground on the United States further afield in the South China Sea.¹¹⁵ A 2024 expert survey conducted by the United States Studies Centre was less pessimistic, with 86 per cent of those surveyed agreeing with the claim that “the United States would prevail” in an “armed conflict ... with China in the Western Pacific,” though this support dropped to 70 per cent when considering a conflict “10 years from today.”¹¹⁶ As noted above, there is a widespread view in the analytical community that continued US conventional dominance in Northeast Asia is not a forgone conclusion and, as expressed in the US Strategic Posture Review: “By the 2030s China’s conventional military build-up could turn the conventional military balance in Asia against the United States and its Allies.”¹¹⁷

Officers and soldiers training ground in Guangxi, China, January 2024.Source: Getty

Any such erosion of US conventional supremacy in Northeast Asia with respect to China will push Japan in particular to look for stronger conventional deterrence options. One option already being pursued by Japan is strengthening its conventional force posture, including commitments to double defence expenditure and bolster defence integration with the United States.¹¹⁸ While Japan — as an advanced, industrialised economy with a strong technology base — will assuredly make a material contribution to the regional balance of conventional power, even at 2 per cent of GDP its defence spending is still being outsized by China at a scale of approximately four-to-one, meaning that additional sources of conventional deterrence may need to be tapped.

Should the US-Japan conventional position in Northeast Asia erode to the point where it is no longer capable of deterring and defeating Chinese efforts to revise the status quo, Japan will be incentivised to forward-deploy TNWs to deter Chinese conventional aggression through the asymmetric escalation deterrence posture described above, i.e. where conventionally inferior states lean on the threat of escalation to theatre nuclear use to deter an adversary from an overcommitment of its conventional military might. Japanese forward deployment of TNWs could be facilitated either through nuclear sharing, where the forward-deployed TNWs would belong to the United States; or nuclear proliferation, where the TNWs would belong to Japan.

Barriers to nuclearisation

As argued above, the changing nuclear and conventional balance in Northeast Asia is creating security rationales for nuclearisation in Japan and South Korea, whether through nuclear sharing or nuclear proliferation. However, there exist in the cases of Japan and South Korea significant constraints on both options.

Pushback from Beijing

Beijing has, in recent years, explicitly come out against US-led nuclear sharing.¹¹⁹ China’s opposition is likely rooted in concerns that nuclear sharing would: (a) diminish China’s nuclear second-strike capability against the United States by allowing the latter to launch a rapid, counterforce nuclear first strike with its forward assets; (b) lower the threshold of a regional nuclear exchange (as above), constraining China’s military freedom of action in the region; and, for reasons (a) and (b), (c) be a foreign policy defeat for the Chinese Communist Party, creating domestic political costs. Similarly, Beijing would likely oppose an independent Japanese or South Korean nuclear weapons capability, particularly for concerns that Japan or South Korea would coordinate their nuclear assets and doctrine with the United States, strengthening regional deterrence against Chinese revisionism.

Chinese opposition to such unfavourable changes in the nuclear balance was seen following South Korea’s 2017 deployment of the US-supplied Terminal High Altitude Area Defence (THAAD) missile defence system. While THAAD was outwardly designed to counter the North Korean missile threat, Beijing was concerned that it could be used by the United States to provide early detection of Chinese ICBM launches, weakening China’s nuclear strike capability against the United States. In response to the announcement, China issued a series of informal sanctions on the South Korean tourism and consumer goods sectors,¹²⁰ leading to losses of between US$5–13 billion¹²¹ and compelling Seoul to accept a series of security concessions, including an agreement not to host additional THAAD batteries. While the ultimate success of these Chinese measures is disputed,¹²² they demonstrate the Chinese resolve to retaliate against unfavourable changes in the strategic balance with the United States, which would certainly factor into any US, Japanese, or South Korean decision making around nuclear sharing and nuclear proliferation.

Domestic politics

Any attempt at nuclear sharing or nuclear proliferation in Japan and South Korea is likely to mobilise oppositional domestic interest groups that will complicate implementation. For example, there will be nuclear non-proliferation interest groups that will oppose any adoption of militarised nuclear capabilities, for example to protect the sanctity of the NPT or for fear that it will heighten the risk of a nuclear exchange.¹²³ This will be a major constraint in Japan, the population of which is vehemently anti-nuclear due to Japan’s ignominious nuclear history. Even in this era of heightened geostrategic tension and perceived existential threats emanating from China and North Korea, popular support for non-acquisition remains high, with a 2019 survey finding that 75 per cent of Japanese respondents being in favour of Japanese ratification of the nuclear ban treaty.¹²⁴

Additionally, there will be NIMBY groups in both states that will resist hosting in their regions the requisite sites for nuclear sharing or nuclear proliferation such as missile silos, military airfields, and weapons storage sites. This resistance will be driven by numerous considerations ranging from noise to environmental damage to having their regions at risk of a nuclear first strike, i.e. to destroy the hosted nuclear assets in the event of nuclear conflict.¹²⁵ For example, the abovementioned deployment of the THAAD battery to Seongju County in South Korea stirred voracious protests which interfered with the construction and operation of the site.¹²⁶ Similarly, Japan’s 2017 announcement of the purchase of two US-supplied Aegis Ashore missile defence systems led to protests in the Akita and Yamaguchi Prefectures — where the systems were to be installed — with particular concern raised about SM3 rocket boosters used in the systems falling onto residential Japanese areas. Then Japanese Defence Minister Taro Kono cited this issue in explaining the decision to scrap the project.¹²⁷

That such disruptions could occur with missile defence suggests particularly strong domestic reactions to nuclear weapons sites on Japanese or South Korean soil. That both states are representative democracies and small and densely populated will make the NIMBY issue all the more intractable.

US non-proliferation policy

The United States is the world’s leading proponent of nuclear non-proliferation, meaning that Tokyo and Seoul would likely clash with Washington if either were to pursue an independent nuclear weapons capability (i.e. ‘nuclear proliferation’).¹²⁸ While, as argued above, the United States has historically refrained from stringent non-proliferation sanctions against strategically aligned states, both Japan and South Korea would undoubtedly be taking on some risk of a deterioration in their relations with the United States if they were to pursue an independent nuclear weapons capability. This could entail, for example, the United States downgrading its extended deterrent commitments; withholding the provision of conventional arms or advanced capabilities; or scaling back its military presence in Northeast Asia.¹²⁹ From the US perspective, these measures might be designed to signal its displeasure with Japanese or South Korean nuclear weapons acquisition, or to leverage the security dividends of such nuclear weapons acquisition to offset the military and financial burdens of extended deterrence. Tokyo and Seoul would need to manage this critical security risk of estrangement from the United States while managing many of the other negative strategic externalities of nuclear weapons development, including the risk of nuclear arms racing,¹³⁰ the risk of preventative military strikes on one’s nuclear facilities,¹³¹ and seeing funding diverted from conventional capabilities.¹³²

The United States is the world’s leading proponent of nuclear non-proliferation, meaning that Tokyo and Seoul would likely clash with Washington if either were to pursue an independent nuclear weapons capability

While there is a compelling strategic logic behind a change in the nuclear order to either nuclear sharing or nuclear proliferation given the changing regional conventional and nuclear balance, there exist significant constrains in both Japan and South Korea for such a shift, including threats of retaliation from China, rancorous domestic politics, and risks of estrangement from the United States. Given these constraints, we would expect both Japan and South Korea to exhaust all options for nuclear horse-trading before braving the hazards of nuclear sharing or nuclear proliferation. There are still many options for ramping up US extended deterrence commitments in a framework of nuclear horse-trading before nuclear sharing or nuclear proliferation becomes a strategic imperative. For example, the United States contributing to Japanese and South Korean conventional deterrence capabilities;¹³³ the US ‘earmarking’ certain tactical nuclear assets for use in contingencies involving Japan and South Korea; the United States and Japan and South Korea establishing a ‘latent’ nuclear sharing capability, for example establishing or upgrading TNW storage sites on Japanese and South Korean territory; or US tactical nuclear assets deploying regionally on a rotational (rather than permanent) basis.

Implications for Australia

The current nuclear order in Northeast Asia most closely resembles nuclear horse-trading, with the United States and South Korea in particular competitively negotiating US extended deterrence commitments that, from the US perspective, offset South Korean demands for nuclear weapons acquisition and, from the South Korean perspective, are sufficient to deter near-term threats from North Korea. A Northeast Asian nuclear order of nuclear horse-trading will not impose upon Australia any significant discontinuities in its strategic environment or relationships. Adjustments to US extended deterrence planning and strategy in terms of Japan and South Korea borne from nuclear horse-trading may precipitate wider shifts in Washington’s approach to extended deterrence that ultimately bear on the US-Australia strategic relationship. For example, the United States’ use of forward-deployed strategic assets to signal its extended deterrence commitments to South Korea may lead to a US preference for similar measures with Australia. However, overall, the strategic implications for Australia of nuclear horse-trading in Northeast Asia will be limited.

As argued above, however, the changing regional conventional and nuclear balance is creating pressures for a change in the nuclear order to nuclear sharing or nuclear proliferation. While significant constraints will reduce the likelihood of either future manifesting, neither can be ruled out entirely, especially in the event of a major strategic shock such as a Chinese invasion of Taiwan. Accordingly, Australia must consider the implications of, and prepare for both of these futures.

What if … nuclear sharing?

In managing the growing threat profiles of China and North Korea, nuclear sharing is a ‘high risk, high reward’ strategy. It’s high reward in that it enhances regional conventional deterrence against China and North Korea without needing to invest in costly conventional systems. It also largely resolves questions around the ongoing durability of US extended deterrence while reducing pressures on Japan and South Korea to pursue an independent nuclear weapons capability which, from a US perspective, advances its non-proliferation goals.

But it is high risk in that it lowers the threshold of regional nuclear use. That is, forward-deployed TNWs — be they American, Chinese, or North Korean — increase the likelihood of a regional conventional conflict escalating to tactical nuclear strikes by giving nuclear-armed states opportunities and incentives for nuclear escalation if their conventional position deteriorates. North Korea so lowered the threshold in 2022 with its State Policy on the Nuclear Forces. Similarly, US regional deployment of TNWs would lower the threshold of nuclear use to include contingencies in which US-led forces were at a conventional disadvantage with respect to North Korea or, more likely, China.

In managing the growing threat profiles of China and North Korea, nuclear sharing is a ‘high risk, high reward’ strategy.

Though the terms of any such nuclear conflict would initially be limited to tactical nuclear strikes in the Northeast Asian theatre, China or North Korea could escalate these nuclear conflicts horizontally to include Australian targets, ranging from military bases to intelligence facilities to critical infrastructure sites. Any such Chinese-North Korean escalatory nuclear attacks would likely be limited in scope, i.e. to a small number of low-yield weapons targeting counterforce, rather than countervalue objectives. This is for two reasons. First, Beijing and Pyongyang would want to save the bulk of its nuclear firepower for strategic deterrence of the United States. And second, any major attack on Australian targets (for example multiple, high-yield nuclear strikes on metropolitan targets) would be highly escalatory and would almost certainly elicit massive retaliation from the United States given that Australia sits under the US nuclear umbrella.

From the Chinese-North Korean perspective, such a limited nuclear attack against an Australian target potentially serves as a useful rung up the escalation ladder. By escalating to limited nuclear strikes out of theatre, it would signal to the United States that it is willing to raise the stakes of the nuclear confrontation, effectively issuing Washington a warning that it needs to back down lest escalation proceed further, e.g. to nuclear attacks on CONUS. At the same time, Beijing and Pyongyang may judge that attacking a US ally is less escalatory than attacking the US directly, and is thus less likely to elicit an overwhelming US response.¹³⁴ In this sense, counterforce nuclear attacks on Australian military targets in the context of a tactical nuclear conflict in Northeast Asia may represent a ‘Goldilocks’ escalation option for China and North Korea: Sufficiently escalatory to send a strong signal to the United States, but not quite escalatory enough to trigger a massive US response. The US Strategic Posture Review refers to such tactics as ‘coercive attacks’:

A “coercive” attack consists of limited conventional or nuclear strikes intended to convince U.S. leadership that the costs of intervening or persevering in a conflict involving the attacker are too high. … Such coercive attacks are bounded in scale [i.e. to few, low-yield weapons against counter-force targets outside of the United States] to avoid eliciting a severe U.S. response. The coercive effect of the attack is based on the threat that additional attacks will follow if the United States refuses to be coerced.¹³⁵

The 2023 Australian Defence Strategic Review (DSR) seemingly acknowledged this risk to Australia by assessing that: “In our current strategic circumstances, the risk of nuclear escalation must be regarded as real.”¹³⁶

US Secretary of Defense Lloyd Austin and South Korean Defense Minister Lee Jong-sup attend a welcome ceremony at the Defense Ministry in Seoul, January 2023.Source: Getty

From an Australian perspective, while a nuclear attack — even one that was, by design, limited — would obviously be devastating, it’s relatively unlikely that such a scenario would ever be realised. First, it would be contingent on a Northeast Asian regional conflict that had already escalated to tactical nuclear use, which would be remarkable on several grounds, not least as a failure of nuclear deterrence and violation of the nuclear non-use norm, both of which have proved durable over nearly 80 years.¹³⁷ And second, it would require an extraordinary level of risk-acceptance from Beijing or Pyongyang, which would be gambling (with US nuclear attacks on their own cities the wager) that Washington would fail to live up to its extended nuclear deterrence commitments to Australia.

Instead, the more material threat to Australia is that the possibility of (1) US forward-deployment of TNWs leading to (2) Northeast Asian theatre nuclear conflict leading to (3) horizontal escalation to limited nuclear attacks on Australian targets, while remote, is perceived in Canberra as material enough to justify limiting Australia’s northward projection of power to avoid entanglement in disputes involving China or North Korea. That is, Australia will avoid projecting power northward to avoid making itself a target for nuclear escalation should a theatre nuclear conflict between the United States and China-North Korea in Northeast Asia emerge. The DSR and Australia’s 2024 National Defence Strategy (NDS) identify a number of Australian Defence Force (ADF) missions that implicitly or explicitly require the northward projection of Australian military power, including contributing to regional deterrence,¹³⁸ contributing to a favourable balance of regional power,¹³⁹ and denying adversaries the space to attack Australian territory.¹⁴⁰ All of these missions would be at stake if Australia were to stifle its northward projection of military power for fear of nuclear escalation in a strategic future of nuclear sharing.

Further, in a strategic future of nuclear sharing, Australia might seek to limit US forces’ ability to operate from Australian territory in Northeast Asian contingencies (especially nuclear contingencies) or coordination with regional US forces for fear of becoming a target for Chinese-North Korean nuclear escalation. This would compromise the military value of the alliance to Washington at a time when the NDS has described Australia’s alliance with the US as “fundamental to Australia’s national security” and has hinged its “Strategy of Denial” — what it describes as “the cornerstone of Defence planning” — on “working with” and “coordinating with” the United States.¹⁴¹

Indeed, for these reasons Beijing and Pyongyang are likely to cultivate the uncertainty of Australian exposure to nuclear escalation, i.e. to limit the Australian northward projection of power and to drive a wedge between Canberra and Washington. North Korea has, for example, threatened Australia with nuclear strikes for “toeing the U.S. line” and “following the U.S. moves to isolate and stifle the DPRK.”¹⁴² And while not specifically directed at Australia, North Korea’s State Policy on the Nuclear Forces demonstrates a similar logic by committing to “neither threaten non-nuclear weapons states [e.g. Australia] with its nuclear weapons nor use nuclear weapons against them unless they join aggression or attack against the DPRK in collusion with other nuclear weapons states.”¹⁴³

In a strategic future of nuclear sharing in Northeast Asia where the threshold of nuclear use is lowered, in order to protect the Australian homeland and maintain the capacity to project power northward, Australia will need defensive options for limited nuclear attacks by China or North Korea.

Accordingly, in a strategic future of nuclear sharing in Northeast Asia where the threshold of nuclear use is lowered, in order to protect the Australian homeland and maintain the capacity to project power northward, Australia will need defensive options for limited nuclear attacks by China or North Korea. Importantly, the goal of a defence against a limited nuclear attack shouldn’t be to establish a ‘watertight seal’ that ensures 100 per cent defence against all conceivable nuclear attacks: Such an option is not realistic given the rapid developments of Chinese (and to a lesser extent North Korean) nuclear capabilities; the expense and military risk attached to maximal defence strategies; and the large amount of territory that Australia would need to defend.¹⁴⁴ Instead, an Australian defence against limited nuclear attack should be oriented around causing maximum disruption to any such attacks as is feasible. From an Australian strategic standpoint, disrupting Chinese-North Korean coercive nuclear attacks would force China and North Korea to commit more to an attack to generate the same effect. For example, if Australia is able to defend against 50 per cent of incoming nuclear-armed missiles, the aggressor must commit twice as many to achieve the same effect. This increasing commitment of force makes the attack more escalatory, increasing the risk to Beijing and Pyongyang of an overwhelming US response through the latter’s extended nuclear deterrence commitments to Australia. This will make Beijing and Pyongyang less likely to initiate the attack in the first place and, as a result, will give Canberra greater confidence in projecting power northward in carrying out the ADF missions listed in the DSR and NDS.

One option open to Australia for increasing its defensive capability against a Chinese-North Korean limited nuclear attack is to contribute to joint pre-emptive counterforce capabilities with its regional allies and partners, for example through contributions to combined intelligence, surveillance and reconnaissance missions or conventional pre-emptive strike capabilities.¹⁴⁵ This would force China and North Korea to deploy additional nuclear launch systems to threaten a limited nuclear attack against Australia — i.e. to overwhelm the enlarged allied pre-emptive strike capability — thereby raising the escalatory risks of such an attack. It would also complicate Chinese-North Korean planning by forcing it to weigh the thresholds for launching a pre-emptive strike of multiple interested parties (as opposed to just the United States) when considering an attack.

Australia is already improving its capability for contributing to pre-emptive strike missions through increasing its access to regional military bases¹⁴⁶ and procuring long-range strike capabilities in the form of nuclear-powered submarines under AUKUS. Increasing efforts in this vein might include efforts to enhance interoperability with the United States and other pre-emptive strike-capable states, particularly South Korea which is explicitly developing a pre-emptive strike capability under its ‘three axes’ concept.¹⁴⁷

A second defensive option for Australia against a limited nuclear attack is investing in its NMD capabilities, including the procurement of systems tailored for Chinese and North Korean nuclear-capable missiles, as well as expanding cooperation on missile defence with allies and partners in the Indo-Pacific. Such cooperation could include joint development of missile defence systems to address next-generation nuclear threats such as hypersonics, as well as information sharing arrangements and forward deployment of Australian sensors to improve warning times and targeting. Australia is already making ground across these domains, including the recently announced Australia-US-Japan collaboration on “networked air defense architecture,”¹⁴⁸ as well as recent integrated air and missile defence tests with the United States.¹⁴⁹

Importantly, the requisite capabilities, doctrine, and force interoperability described above for establishing defensive options against Chinese-North Korean limited nuclear strikes takes time to develop. Thus, Australia will not be in a position to rapidly deploy such defensive options should nuclear sharing in Northeast Asia arise unless the necessary investments are made now, when this threat is relatively low. Accordingly, Australia needs to be considering now: What specific operational requirements exist for defending against Chinese-North Korean limited nuclear strikes; the extent to which Australia’s current developments in NMD, long-range strike capabilities, and force interoperability do and do not meet these needs; and where to direct resources in the near-term to fill any gaps.

What if … nuclear proliferation?

Nuclear proliferation would impose upon Australia trade-offs between its relations with Japan and South Korea on the one hand and its standing as a champion of the rules-based international order on the other. Australia has historically been a strong proponent of the international nuclear non-proliferation regime, including as a party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT); as a founding member of the International Atomic Energy Agency and the Non-Proliferation and Disarmament Initiative; as a member of the Nuclear Suppliers Group (NSG); and as one of the few states to issue autonomous nuclear non-proliferation sanctions (against North Korea). Japanese or South Korean nuclear weapons development would be an acute challenge to the goals of the nuclear non-proliferation regime, forcing Australia to reconcile its strong strategic and economic relations with both states on the one hand and its non-proliferation policies and preferences on the other.

There are two ideal-type policy positions that Australia could take in response to Japanese and South Korean nuclear weapons development. The first would be vigorous opposition, deploying diplomatic and economic sanctions against Japan and South Korea to both signal non-acceptance of Japanese-South Korean nuclear weapons statehood and to raise the pressure for nuclear disarmament. Measures in this vein may include Australia supporting multilateral measures to censure these states, for example in the UN General Assembly; using its position in the Nuclear Suppliers Group to push for a reduction of nuclear exports to these states; or restricting trade with Japanese and South Korean entities per relevant domestic non-proliferation laws (see Box 2). The second ideal-type policy position would be tacit acceptance of Japanese-South Korean nuclear weapons development, eschewing sanctions against either state and quarantining disagreements with Tokyo and Seoul on nuclear issues from continued engagement and growth in bilateral relations across other domains.

Australia would almost certainly opt for the latter, as any degradation in relations with Tokyo or Seoul would firstly damage economic relations with Australia’s second and fourth largest trading partners, and secondly compromise defence cooperation with these states as they emerge as critical partners in Australia’s efforts to counter Chinese expansionism.¹⁵¹ Indeed, the NDS stakes Australia’s “Strategy of Denial” and regional deterrence on Australia’s ability to “work with” and “coordinate with” its “key partners,” with explicit reference to Japan and South Korea.¹⁵²

However, any appearance of Australia selectively eschewing its non-proliferation bona fides for strategic or economic exigency is likely to perturb Australia’s other partners in the Indo-Pacific. This is for two reasons. First, Southeast Asian states in particular are increasingly pursuing civil nuclear programs under onerous export control and safeguards regulations set out in various international non-proliferation regulatory instruments (IAEA safeguards agreements, NSG control lists, etc.). Accordingly, they are likely to resent as unfair any relaxation of global non-proliferation rules against Japanese and South Korean nuclear weapons development while those same rules impede Southeast Asian states’ pursuit of civil nuclear capabilities, especially given that the latter are explicitly protected under Article IV of the NPT.

And second, Beijing will likely deploy disinformation campaigns to foment regional opposition to Japanese and South Korean nuclear weapons development and will almost certainly take the opportunity to paint Australia as a duplicitous and irresponsible regional power in terms of its tacit acceptance of claimed Japanese-South Korean violations of the non-proliferation regime and destabilising nuclear arms racing.¹⁵³

As Australia attempts to thread the needle of maintaining strong links with nuclear-armed Japan and South Korea on the one hand and upholding its status as a trusted regional partner and champion of the rules-based international order on the other, Canberra will need to craft a policy that signals Australia’s commitment to regional stability and nuclear non-proliferation while also protecting its strong strategic and economic partnerships in Northeast Asia.

One policy that approaches such a balance is to advocate for mutual disarmament between Japan and South Korea on the one hand and China and North Korea on the other.

One policy that approaches such a balance is to advocate for mutual disarmament between Japan and South Korea on the one hand and China and North Korea on the other. That is, while continuing to advocate for full Japanese-South Korean nuclear disarmament, demand only that such measures be incremental and contingent on reciprocal Chinese-North Korean measures. Under such a policy, Australia would only impose sanctions on Japan and South Korea if they failed to respond in kind to positive disarmament efforts by China and North Korea, with proportionality determined and compliance monitored on a case-by-case basis.

‘Disarmament’ for Japan, South Korea, and North Korea in this framework would be understood in terms of the incremental elimination of the technologies, materials, and infrastructure underpinning nuclear weapons development, ultimately bringing each state into compliance with the NPT. Illustrative measures would include disassembling bomb cores, disposing of fissile material, and bringing nuclear facilities under international safeguards.¹⁵⁴ Disarmament for China, a legal nuclear-armed state under the NPT, would instead be understood in terms of halting, if not reversing its nuclear modernisation program consistent with its obligations under Article VI of the NPT. Illustrative measures would include halting its production of new nuclear warheads and refraining from fitting its emerging hypersonic glide vehicle capability with nuclear warheads.¹⁵⁵

While such an Australian policy of tit-for-tat disarmament would be unlikely on its own to bring about the lofty goal of regional nuclear disarmament (Australia having limited leverage in shaping nuclear outcomes in Northeast Asia), it would serve Canberra’s narrower diplomatic goal of signalling Australia’s ongoing commitment to regional stability and nuclear non-proliferation while shifting the onus for these outcomes onto China and North Korea.

Conclusions

Northeast Asia is in a state of flux. Multipolarity is emerging, characterised by the growing threat profiles of China and North Korea, questions around the ongoing durability of US extended deterrence, and Japanese and South Korean nuclear latency. How Washington, Tokyo, and Seoul manage this changing strategic environment will shape the future of the Northeast Asian nuclear order.

In this report, I described three candidate nuclear orders in Northeast Asia to 2040. The first is nuclear horse-trading, in which the US-Japan and US-South Korea dyads competitively negotiate adjustments to US extended deterrence that, from the US perspective, offset Japanese-South Korean demands for nuclear weapons acquisition; and, from the Japanese-South Korean perspective, are sufficient to deter emerging threats from China and North Korea. The second is nuclear sharing, in which the US redeploys TNWs to Japanese and/or South Korean territory to bolster deterrence against Chinese and North Korean attempts to alter the status quo, strengthen the durability of its regional extended deterrence commitments, and reduce demand in Tokyo and Seoul for an independent nuclear weapons capability. And the third is nuclear proliferation, in which Japan and South Korea leverage their advanced nuclear latency to pursue an independent nuclear deterrent.

Australia must consider seriously the possibility that nuclear sharing or nuclear proliferation emerges in the region by 2040.

Currently, the nuclear order in Northeast Asia most closely resembles nuclear horse-trading, with Japan and South Korea inching closer to a ‘bomb in the basement’ while the United States extends carefully calibrated extended deterrence commitments that offset Japanese and South Korean demand for an independent nuclear weapons capability but avoid over-committing the United States in a way that could escalate to Chinese or North Korean nuclear strikes against the US homeland. While there is a compelling strategic logic behind a shift to nuclear sharing or nuclear proliferation by 2040, both of these futures face significant constraints, including threats of retaliation from China, rancorous domestic politics, and risks of estrangement from the United States. This means that the United States, Japan, and South Korea are likely to exhaust all options for nuclear horse-trading before braving the hazards of nuclear sharing or nuclear proliferation.

From an Australian perspective, a future of nuclear horse-trading in Northeast Asia poses few risks. However, given the strategic challenges of a shifting regional conventional and nuclear balance and the potential for a sudden strategic shock, such as a Chinese invasion of Taiwan, Australia must consider seriously the possibility that nuclear sharing or nuclear proliferation emerges in the region by 2040.

Nuclear sharing poses a particular risk to Australia in that forward-deployed US TNWs in Northeast Asia will lower the threshold of a theatre nuclear exchange which may be horizontally escalated by China or North Korea to include limited nuclear strikes on Australian interests. While this outcome would be unlikely, Beijing or Pyongyang may be able to frame this risk as material enough to deter Australia from projecting power northward, compromising the Australian ability to contribute to regional deterrence and a favourable balance of regional power, and deny adversaries the space to attack Australian territory. Accordingly, Australia needs to be investing now in defensive options for limited nuclear strikes as a hedge against future reemergence of nuclear sharing in Northeast Asia, for example by continuing development of its long-range pre-emptive strike capabilities and NMD.