Biden flies to San Diego to sign nuclear submarine deal amid bank shares plummet

President Joe Biden is traveling to San Diego on Monday to announce Australia’s purchase of nuclear-power submarines to modernize its fleet and help the U.S. counter China‘s growing influence in the Indo-Pacific.  

Before boarding Air Force 1, the president made brief remarks, hoping to reassure Americans that ‘U.S. banking is safe’ following the collapse of Silicon Valley Bank on Friday.

Soon after Biden’s departure, the New York Stock Exchange opened, and trading was quickly halted for three banks: First Republic Bank, Western Alliance and PacWest after shares fell by 75 percent.

Financial jitters continue to overshadow the international deal as Wall Street scrambles to figure out what is triggering multiple bank failures across the U.S. Stocks are swinging Monday sharply as investors scramble to find someplace safe to park their money.

President Joe Biden departs for San Diego, California to meet with Australian Prime Minister Anthony Albanese and UK’s Prime Minister Rishi Sunak to announce a nuclear submarine deal.

Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on March 13, 2023 in New York City. Soon after Biden’s departure to California, US stocks slumped Monday amid worries over the banking system following the collapse of Silicon Valley Bank and others.

San Diego is Biden’s first stop on a three-day trip to California and Nevada. He will discuss gun violence prevention in Monterey Park, California, and his plans to lower prescription drug costs in Las Vegas. 

The trip will include fundraising stops as Biden steps up his political activities before an expected announcement next month that he will seek reelection in 2024. 

Upon landing in San Diego, home of the U.S. Pacific fleet, Biden will meet with Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak – two of America’s closest allies – as part of the 18-month nuclear partnership known by the acronym AUKUS which stands for AUstralia, UK, US. 

The consortium, announced in 2021, paved the way for Australia’s access to nuclear-powered submarines, which are stealthier and more capable than conventionally powered boats, as a counterweight to China’s military buildup.

Ahead of the tri-lateral meeting, Sunak announced he will increase U.K. military funding by 5 billion pounds ($6 billion) over the next two years in response to Russia’s invasion of Ukraine and Chinese aggression.

The AUKUS partnership was announced in 2021, but Monday’s announcement will cement the details. Australia is purchasing up to five Virginia-class boats as part of the deal, according to the Associated Press.

China objects to the deal, arguing it violates the Nuclear Non-Proliferation Treaty, which outlaws the transfer of nuclear weapons materials from a nuclear-weapon state to a non-nuclear-weapon state.

Australian officials counter that they are working to acquire nuclear-powered and not nuclear-armed submarines. 

Biden will also hold bilateral meetings with Albanese and Sunak in San Diego.

Australia will purchase up to five Virginia-class submarines – above the Virginia-class USS North Dakota

British Prime Minister Rishi Sunak, left, speaks with Australia’s Prime Minister Anthony Albanese, in the Lionfish seafood restaurant in San Diego on Sunday

British Prime Minister Rishi Sunak speaks to the UK press traveling with him to San Diego

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The logo of Silicon Valley Bank SVB is pictured at its German branch in Frankfurt, Germany as concerns about a potential international financial contagion grows

Signature Bank was taken over by New York state agencies last Friday, March 12, 2023.

The three sides have been working to provide Australia with a fleet of nuclear-powered submarines, given restrictions on technology transfers and classified nuclear processes.

On his way to the U.S., Sunak said China ‘presents an epoch-defining challenge to us and to the global order. It’s a regime that is increasingly authoritarian at home and assertive abroad, and has a desire to reshape the world order.’

But, he added, ‘you can’t ignore China’ given the size of its economy.

‘It’s right to engage with China, on the issues that we can find common ground and make a difference on, for example, climate change, global health, macroeconomic stability,’ he said.

‘That’s the right approach whilst being very robust in defending our values and our interests.’

The secretly brokered AUKUS deal included the Australian government’s cancellation of a $66 billion contract for a French-built fleet of conventional submarines, which sparked a diplomatic row within the Western alliance that took months to mend.

French President Emmanuel Macron pulled his ambassador from Washington in September 2021, and later met with Biden in Italy during a G20 so the two could make amends.

Biden called Macron on Tuesday, but a White House readout of the call didn’t say if the AUKUS deal came up. 

The two leaders did discuss the growing Chinese influence in the South Pacific, an issue that also worries Australia.