America’s view of China as a “pacing threat” has shaped its defence priorities as the military seeks to maintain an edge over a rapidly modernising PLA. In the first of a three-part series on how US budget tensions will affect efforts to deter China, we look at the Golden Dome missile defence system. China’s expanding military footprint in the Indo-Pacific is now a focus of America’s defence strategy, with a renewed emphasis on space-based capabilities since Donald Trump returned to the White House. Central to this is Trump’s ambitious bid to revamp the US Space Force and create a “next generation” missile defence system – the so-called Golden Dome. Analysts say that if it gets built, the multibillion-dollar shield could bolster the US’ capacity to protect itself from long-range missiles while also deterring China’s military in the Indo-Pacific region, including in the event of a conflict near the Taiwan Strait. But questions remain over the feasibility and cost of the project, which would rely on a network of satellites and space-based sensors to intercept missiles. ‘Signal to China’ The project was announced days after Trump was inaugurated in January, when he issued an executive order calling for an “Iron Dome for America” – borrowing the name of Israel’s vaunted missile defence system. It has since been renamed the Golden Dome, and the US Department of Defence has set out a timeline for deliverables starting early next year. Trump’s order said the shield would be designed to “deter – and defend its citizens and critical infrastructure against – any foreign aerial attack on the homeland” using “ballistic, hypersonic, advanced cruise missiles and other next-generation aerial attacks from peer, near-peer and rogue adversaries”. Shaun McDougall, a US defence budget analyst with Forecast International, said space-based missile defence was a “growing priority” under the Joe Biden administration, and Trump’s initiative was “poised to accelerate that trend in the coming years”. “The likely intent is to signal to China that launching missile attacks against US interests wouldn’t be worth the risk or effort, given the increased likelihood of failure under new defensive systems,” McDougall said. Malcolm Davis, a senior defence analyst with the Australian Strategic Policy Institute, said the Golden Dome’s use of space-based technology was clearly aimed at detecting and intercepting missiles in the boost phase, when the rocket engines were firing. “[It] lasts maybe 90 seconds to a couple of minutes … the missile is still moving relatively slowly and is highly visible by space-based infrared sensors,” Davis said. “Boost-phase intercept would also be essential to counter the emerging threat of hypersonic weapons, be they hypersonic glide vehicles delivered by ballistic missile or hypersonic cruise missiles relying on scramjet technologies.” But he said the challenge would be that the space-based assets would have to be in a low-Earth orbit for efficiency, which would “necessitate a large number of sensors and interceptors overhead above likely missile launch locations”. While mega-constellations of small satellites were now a mature technology, with lower launch costs making space-based missile defence more practical, Davis said it was still highly unlikely that the proposed Golden Dome would be able to provide a “leak-proof” defensive shield for the United States. “Warheads will still get through, and traditions of nuclear deterrence and mutually assured destruction still remain relevant. Where I see the Golden Dome being most effective is in countering limited missile threats of intermediate-range missiles against forward-deployed forces and bases in the Indo-Pacific,” he said. “So defending forward bases – such as Guam, Okinawa and so on – will benefit from Golden Dome, and make it harder for China to strike at those bases, or at carrier battlegroups trying to defend Taiwan.” He added that the shield could also “undermine the PLA’s ability to do anti-access and area denial against the US and its allies” – a strategy to block the enemy from specific areas. McDougall agreed that Guam’s defences could “eventually be strengthened by future space-based capabilities, including those envisioned under Golden Dome”. “For example, missile tracking satellites would help detect incoming threats, and the theoretical space-based interceptors being discussed by the Trump administration for Golden Dome could potentially engage and neutralise incoming ballistic missiles or boost-glide hypersonic missiles targeting Guam,” he said. He said the project raised “new questions” about nuclear stability, the potential for an arms race, and the further weaponisation of space. He said while the US had not abandoned more “conventional” deterrence measures, Trump appeared to view the Golden Dome as an “added layer of deterrence”. “[This] signals a broader shift in how the US views deterrence,” he said. “The programme suggests the administration may no longer see the strategic nuclear arsenal alone as a sufficient deterrent against adversaries like China and Russia.” It comes amid rising tensions in the Indo-Pacific, including over Beijing’s intensified military pressure on Taiwan. Beijing claims the self-ruled island as its territory and has not ruled out the use of force to take control of it. Most countries, including the US, do not recognise Taiwan as an independent state but oppose any attempt to seize the island by force. The People’s Liberation Army is meanwhile undergoing a rapid modernisation and build-up. In September, the PLA Rocket Force conducted its first test launch of an intercontinental ballistic missile in 44 years. The DF-31AG, with a range of 13,200km (8,200 miles), puts the entire US mainland within reach. A Pentagon report on China’s military development in December said the country had an estimated 400 ICBMs as of 2023, and had “probably completed” construction of three solid-propellant silo fields as of 2022. China’s new ICBMs would “significantly improve” its nuclear-capable missile forces and required increased nuclear warhead production, the report said. It also noted the introduction of advanced technologies such as multiple independently targetable re-entry vehicles that allow missiles to carry a payload containing several warheads. The report also said China was likely to be developing advanced nuclear delivery systems such as a strategic hypersonic glide vehicle that could operate in low-Earth orbit – giving it unlimited range and the ability to strike from any direction, including the South Pole flight path. It said China was developing these technologies “partly because of long-term concerns about United States missile defence capabilities as well as to attain qualitative parity with future worldwide missile capabilities”. The PLA’s newest hypersonic missile, the DF-27, was tested in 2023 and is said to have a range of 5,000-8,000km – meaning it could potentially reach Hawaii and Alaska. Sky-high costs However, questions have been raised over the cost of the Golden Dome project and whether it is necessary to build a network of weapons and space-based infrastructure. The US already has several missile defence systems in place, including the Terminal High Altitude Air Defence systems, Aegis systems on warships, and Patriot missiles. But it has struggled to develop a missile shield covering all of its territory – an ambition that dates back to the Strategic Defence Initiative proposed by the Ronald Reagan administration in the 1980s. Trump in May said the Golden Dome would cost US$175 billion and be “fully operational” by the end of his term as president. But according to the Congressional Budget Office, the US may need to invest up to US$542 billion over two decades to develop and launch a network of space-based interceptors for the project. In March, Chief of Space Operations General Chance Saltzman said his service needed a budget increase of at least 20 per cent for “a fundamental shift, a step function shift” to build new capabilities, including the Golden Dome, and respond to Chinese and Russian military investments in space. As the Trump administration slashes government spending, it aims to spend more on defence. A discretionary budget request in May seeks to increase the defence budget by 13 per cent, which would take it from US$892.6 billion in 2025 to US$1.01 trillion in 2026. That would mark the first time US defence spending has passed the US$1 trillion mark. According to the budget document, the aim is to “deter Chinese aggression in the Indo-Pacific” while backing the Golden Dome and “space dominance to strengthen US national security and strategic advantage”. But Roger Wicker, chairman of the Republican Senate Armed Services Committee, said the numbers did not add up. He said the 13 per cent increase did not equal spending more than US$1 trillion on defence in 2026 as it included this year’s reconciliation bill – a process for specific changes to federal spending, revenue and the debt limit. Wicker said the administration was “requesting a budget of US$892.6 billion, which is a cut in real terms” for 2026. The budget document released in May also suggested that US Space Force spending would go down by 13 per cent next year – from the US$29.4 billion requested by the Biden administration for 2025 to US$26.3 billion. The reconciliation bill, passed in the House in late May and currently pending in the Senate, calls for US$150 billion mandatory funding for national defence, including a US$25 billion down payment for the Golden Dome and US$11.1 billion to improve the Indo-Pacific Command’s capabilities in areas such as “space superiority” and providing additional military support to the government of Taiwan. The Senate version of the reconciliation bill, released earlier this month, aligns with the House proposal, appropriating a similar amount for both the Golden Dome and the Indo-Pacific Command. But several Republican senators have pointed to problems with the bill passed in the House, suggesting there could be revisions if the party fails to reach a compromise and maintain its narrow majority vote. ‘Hard to reconcile’ Analysts said the Golden Dome project would rely on the reconciliation bill or other sources of funding, and the base defence budget was expected to remain at this year’s level. Clayton Swope, deputy director of the aerospace security project at Washington-based think tank the Centre for Strategic and International Studies, said a smaller Space Force budget was “hard to reconcile” with the Trump administration’s priorities, particularly Golden Dome. “[But it] probably reflects an intention to budget Golden Dome and other high priorities separately,” he said. “For example, the president’s signature policy bill, separate from the budget request, includes a significant amount of funding for Golden Dome.” McDougall said the Trump administration appeared to be shifting funding out of the base budget for programmes like Golden Dome that it planned to support through the reconciliation bill instead. “This accounting approach is less transparent than a traditional budget request and makes it more difficult to track spending patterns,” he said. He said the bill was the foundation for the 2026 defence spending increase and would act as a “short cut” to obtain funding for high-priority programmes. “Going forward, either the Space Force’s base budget will need to increase in [2027] and beyond, or the administration will have to pursue further supplemental funding to sustain the space component of the Golden Dome programme,” he added. Swope said the administration was likely to focus on capabilities that helped the US establish and maintain space superiority. “Such capabilities could be used to deter hostilities against the United States not just in the space domain, but generally in any domain,” he added.