A major diplomatic spat has erupted after France recalled its ambassadors to Australia and the USA. The rift follows Australia cancelling an order for France to supply it with 12 conventional diesel-powered submarines. The deal was signed in 2016 and was worth $37 billion in business to the French. Instead, Australia has opted to buy nuclear-powered submarines, reneging on the 2016 agreement. France's President Macron called the cancellation of the deal a "stab in the back" and a "betrayal" by Australia. Mr Macron also recalled France's top diplomat to the USA. He said the US and Australia were exploring "the possibility of future cooperation on nuclear-powered submarines".

A new, strategic security alliance between Australia, the UK and the USA is the cause of the split. The alliance is called AUKUS – an acronym based on the names of the three countries signed up to it. AUKUS means Australia will be provided with the technology to operate nuclear-powered submarines. France says it was only informed of the alliance hours before it was publicly announced to the world. France is the USA's oldest ally. The French foreign minister said his country's "exceptional decision" was because of the "exceptional gravity" of the situation. It is said AUKUS is to counter China's influence in the region. China accused the three AUKUS powers of displaying a "Cold War mentality".