The Arsenal of Democracy: The Strategic Shift of the United States towards the Indo-Pacific Region

On 22nd of May 2025, the U.S. House of Representatives passed the “One Big Beautiful Bill” (OBBB/ H.R.1). The bill included an additional $150 billion for the Department of Defence (Insinna, 2025a). While both the House and the Senate have agreed to an additional $150 billion for defence, the exact appropriations are still to be finalized. The Senate supports more spending on munitions, whereas the House wants to focus on shipbuilding (Insinna, 2025b). 

The House version of the bill is nonetheless indicative of the U.S. shifting its strategic focus toward the Indo-Pacific region. U.S. allies and adversaries must react to the consequences and mitigate risks of this strategic reprioritization by the U.S. 

Prioritizing the Indo-Pacific

Section 20009 of the bill is uniquely dedicated to appropriating the necessary resources to improve the capabilities of U.S. Indo-Pacific Command, with a substantial $11.1 billion allocated. This includes investments in air fields, logistical infrastructure, as well as funding for Naval and Marine Corps exercises. There are also investments in the defence industrial base, such as $35 million for improving additive manufacturing capabilities dedicated solely to the Indo-Pacific.

The largest item within Title II is dedicated to shipbuilding and improving the naval industrial base, with a total allocation of $33.7 billion. The appropriation is not simply for assets but also for long-term investments in the industrial base. For example, $110 million is earmarked for rolled steel fabrication facilities, which are vital for shipbuilding. Similarly, $500 million is earmarked for building additional dry-dock capacity, necessary for shipbuilding but also for the refits, replenishment and maintenance.

The reallocation of resources and personnel is not easy, and new technology takes years to develop. The OBBB indicates the readiness of the U.S. to make investments in not just assets like a new Virginia-class submarine or additional Guided Missile Destroyers, but also in medium- and long-term initiatives aimed at rebuilding and recalibrating the U.S. defence industrial base to deal with modern, post-9/11 and post-GWOT challenges, which are primarily in the Indo-Pacific (One Big Beautiful Bill Act, 2025).

Implications, Consequences and Risks

Europe

With regard to NATO, the U.S. has increasingly pressured members to increase their defence spending, recently setting a 5% target (France24, 2025). Clearly, the U.S. is attempting to equalize the burden-sharing among members. With the Strategic Defence Review in the U.K. and a proposed increased defence budget in Germany (Barrie,2025; Rothwell, 2025), Europe clearly understands the U.S. strategic shift and they are preparing accordingly. This will also require greater investment in the European defence industrial base, something that the new European Defence Industry Programme and the European Defence Fund may be the beginning of—even if the combined €8.8 billion may appear negligible compared to U.S. efforts (European Commission, no date a; European Commission, no date b). 

European NATO members have also been encouraged to focus solely on their primary theatre, the Euro-Atlantic (DerSimonian and Park, 2025). European NATO members must be prepared to operate with a reduced U.S. presence (Mackrael and Michaels, 2025). They must make serious investments in their defence industrial base, troop numbers and training (Siebold, 2025).

Concerning the Russia-Ukraine War, the U.S. has clearly shifted and is hoping for a negotiated settlement. Most significantly, both Secretary of State Rubio and President Trump have indicated their willingness to simply “walk away” should negotiations falter (Kingston, 2025). This would leave the Ukrainians exposed and would force Europe to solely supply financial aid, weapons and intelligence if they wish to keep Ukraine fighting. While the U.S. walking away is not guaranteed, the possibility remains realistic.

Indo-Pacific/ Asia

The U.S. Secretary of Defence has recently urged regional allies to make greater investments in their own defence and to further integrate their defence industrial sectors (Hegseth, 2025). Allies like Japan and South Korea will continue to play a key role in U.S. efforts in the Indo-Pacific. South Korea, in particular, with its substantial defence industrial base and export capacity, is a crucial partner (Sang-ho, 2025; Yasuyo, 2025). 

China has increasingly invested in their defence industry and have extraordinary shipbuilding capacity. China clearly understands the U.S. strategic shift and will attempt to counter U.S. actions (McGowan and Veedon, 2025). China will also have to respond to increased U.S. military activity in the region carefully if it wishes to avoid escalation (Needham, 2025).

Regional players, both U.S. allies and adversaries, must be ready to accommodate the U.S. playing a greater role in the region.

Middle East

Since October 7th 2023, Israel has been in constant conflict, and the U.S. has dedicated both resources and personnel to aid Israel (Knickmeyer and Associated Press, 2025). However, the U.S. has now shifted toward negotiations with Hamas, the Houthis and Iran. This shift is presumably part of the broader strategic pivot to the Indo-Pacific, assets like THAAD have been dedicated to Israel but are limited in number and are much needed in the Indo-Pacific (Reuters, 2025; Defense News Army, 2025; Montgomery and Sayers, 2019).  

The OBBB should signal to the Israelis that the U.S. is shifting its focus and that munitions production, missile defence and other assets will be primarily dedicated to the Indo-Pacific rather than Central Command. Israel will have to adopt a strategy in which the U.S. plays a reduced role, something which Israeli leaders are already acknowledging (Ross, 2025).

Conclusion

The United States is shifting its focus, resources and personnel to the Indo-Pacific region to tackle a rising China. American resources and personnel are scarce and their deployment must be prioritized. The OBBB and the additional $150 billion are clearly a part of this strategic shift and should serve as a bellwether for allies and adversaries. It aims to revitalize and rebuild the defence industrial base with a focus on China. 

The Euro-Atlantic and the Middle East must be prepared for a smaller U.S. footprint. Meanwhile, the Indo-Pacific must be prepared for a heavier U.S. footprint, supported by the industrial backing necessary for the U.S. to act effectively in the region.

Bibliography

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