Australia, the U.S., and the U.K. updated the terms of the AUKUS trilateral security agreement on August 15th. The new agreement removes limitations on the export of weapons and allows for easier sharing of information, technology, and most prominently, defense products and services, as reported by the U.K. Defence Journal.

This historic decision from the AUKUS states has come after struggles to strengthen nuclear submarine production in the three countries. The move culminated in the U.S. State Department amending its International Traffic in Arms Regulations to add exemptions to licensing requirements for the export of military technology and services to the U.K. and Australia. The U.K. and Australia also made similar similar licensing exemptions. According to the U.K. Defence Journal, these changes created comparable export control frameworks in the three partner states, allowing for significantly easier trade.

As stated in the Financial Times, Richard Marles, Australian Defence Minister, believes these reforms to be capable of revolutionizing defense trade and cooperation by enabling collaboration at a scale capable of meeting Australia’s strategic needs. Similarly, in an August 15 press release, U.K. Defence Secretary John Healey and Foreign Secretary David Lammy remarked on the critical importance of strengthening alliances and breaking down barriers to trade and cooperation to boost joint security, stability, and growth. Some erred on the side of caution, though; Chair of the U.S. House Foreign Affairs Committee Michael McCaul urged lawmakers to reconsider the changes, asking them to narrow the scope of the exclusions in order to allow for the allied countries, particularly the U.S., to effectively deter conflicts in Asia, as explained by The Express Tribune.

Though these new AUKUS changes are explicitly beneficial to the trade of arms between the AUKUS states, the agreement may have lasting consequences for the United States. At this time, the U.S. is unable to even bolster its own nuclear submarine arsenal, with production averages currently lagging at 1.3 submarines per year. Current rates of production may hamper the U.S.’ capability to deliver promised submarines to Australia, which may damage relations between the AUKUS states.

The changes to the AUKUS agreement don’t only have consequences in the West, though, as China sees the agreement as a threat to the “authority and effectiveness” of the Nuclear Non-Proliferation Treaty, according to spokesperson Wang Wenbin in a press conference on May 15. Though China may be attempting to deflect to bolster its own defenses, the AUKUS agreement is a serious threat to nuclear non-proliferation, as the main military product to be traded between the three countries is the U.S.’ Virginia-class nuclear submarines. There are also plans to develop the U.K. and Australia’s own shipyards. China views the changes as a serious threat, leading to increased tensions as the U.S. and China continue to strengthen their respective nuclear arsenals.

The new AUKUS agreement also worries China expert Ross Garnaut, the former Australian Ambassador to China. At a symposium at the Australian National University on August 15th, Garnaut urged Australia to not agree to the revamped AUKUS so readily, arguing that China will eventually become more important to Australia than the U.S. in coming years, and that Australia’s sovereignty may be at risk if further military cooperation with the U.S. drags Australia into a war with China.

China has long felt threatened by the U.S.’ defense capabilities, but the updates to the AUKUS agreement give the U.S. even more of an edge, strengthening its position with its allies and creating an avenue into the South Pacific through Australia. These changes may have lasting consequences on U.S.-China relations, potentially leading to a second Cold War as both powers continue to amass nuclear weaponry. Australia and the U.K. may also be caught in the conflict as they continue to expand military cooperation with the United States. Though the updates to the agreement did allow the U.K. and Australia to strengthen their own nuclear arsenals, the new regulations may only serve to embolden the U.S. against China.