Hegseth warns of end to US defense subsidies, calls for new Pacific order

US Secretary of War Pete Hegseth struck a notably transactional tone at the 23rd Shangri-La Dialogue on Saturday, laying out a sweeping Indo-Pacific strategy that places burden-sharing at its centre and explicitly rules out American dominance or any other country’s over the region.

Addressing a room packed with defence ministers and military chiefs from across the Asia-Pacific, Hegseth, on his fourth official visit to the region since taking office, outlined a revised National Defense Strategy that marks a clear departure from the post-Cold War model of US security guarantees.

“We are charting a new course for our alliances and partnerships: one that is grounded in the realities of power and interests. It is a course that will leave America stronger, our allies and partners more capable, and the Pacific region more stable and secure,”Pete Hegseth said.

The sharpest message of the speech was aimed squarely at allies who have long relied on Washington’s security umbrella without matching its investment. Hegseth declared the model of American protection for wealthy nations to be definitively over.

“The era of the United States subsidizing the defense of wealthy nations is over. We need partners, not protectorates. We seek alliances built on shared responsibility, not dependency,” Hegseth added.

Hegseth offered South Korea as his model of what genuine burden-sharing looks like, praising President Lee’s decision to raise defence spending to 3.5% of GDP and assume greater responsibility for its own conventional defence, a benchmark he appeared to be setting for others in the room.

In a moment that drew quiet attention, he took an implicit swipe at European NATO members: “I think Western Europe might take note.” He added, to mild amusement in the hall: “Less Shangri-La, more ships, more subs.”

While Washington’s tone on China has been more measured since last month’s Trump–Xi summit in Beijing, the Secretary was unambiguous that any bid for regional dominance would be resisted.

“A Pacific dominated by any hegemon would unravel the regional balance of power and undermine the equilibrium we all seek to preserve.”

He described US-China relations as the best they have been in years, crediting the Trump administration’s approach of “strong, quiet, and clear” engagement. The two presidents, he said, agreed to build a “constructive relationship of strategic stability based on fairness and reciprocity” , a formula Hegseth described as “truly historic.”

“What we seek and what President Trump has consistently articulated — is a genuinely stable equilibrium that works for Americans as well as for our allies. A favorable, but durable, balance of power in which no state, including China can impose its hegemony and hold the security or prosperity of our nation and our allies in question.”

On the military dimension, Hegseth outlined a doctrine centred on “deterrence by denial” along the first island chain- a strategic belt stretching from Japan through Taiwan and the Philippines to Borneo. He said the US would build a distributed and resilient military posture designed to make aggression “infeasible, escalation unattractive, and war deemed irrational.”

He also signalled a shift in communication style, pledging to move away from what he called “performative outrage” — loud diplomatic protests that he said signal virtue but do not project capability.