A prominent US think tank has urged Washington to streamline bureaucracy, strengthen institutions and recalibrate its policies with allies to solidify cooperation and consolidate its foothold in the escalating rivalry with China.

Intelligence sharing, coalition planning and arms sales are suffering from structural flaws which hinder multinational effective collaboration, risking “potentially catastrophic” results, according to a report published by the Centre for Strategic and International Studies on Tuesday.

“If the United States fails to make these changes, China will find it much easier to dominate East Asia,” the report warned.

“At worst, it risks defeat in a war between an increasingly assertive and powerful China and a disjointed coalition of strong but poorly coordinated allies and partners.”

The report, co-written by seven analysts, was based on interviews, discussions and workshops between June 2024 and March 2025 with more than 100 officials and experts across Europe and the Indo-Pacific, including from Australia, South Korea, Japan, Denmark, Germany and Taiwan.

The report comes as the US faces a pivotal test in managing its alliances after President Donald Trump returned to office amid shifting global power dynamics.

The Trump administration has stressed that Nato members and Indo-Pacific partners should bear more of their defence burden, pointing to the risk of the US being unnecessarily drawn into regional wars, while also receiving more opportunity to strengthen alliances amid strained ties between Beijing and some partners, such as India and the Philippines, the report said.

It noted that the US’ global allied network was becoming more important as the strategic competition with China in the Indo-Pacific emerged as the “primary driver” of US policy.

“Nowhere is the necessity of allies truer – or more important – than in the Indo-Pacific region, where China’s rise and increasingly aggressive behaviour demand a concerted multinational response led by the United States,” the report said.

It advised the US to reform its systems and environment in allied security cooperations, prioritising “faster arms sales, broader intelligence sharing and more coherent multinational strategic planning”.

US intelligence sharing was hampered less by unwillingness than by overclassification, trust concerns, autonomy anxieties and incompatible systems, it said.

Some partners, including those in Asia, had expressed frustration over delays in sharing intelligence or operational plans on issues involving mainland China, such as issues around Taiwan and the South China Sea, the report said.

Bureaucratic inertia driven by “not releasable to foreign nationals (NOFORN)” rules and a risk-averse culture further delayed intelligence sharing, it said.

Coalition planning remained US-centric and ad hoc, with military-to-military ties particularly lacking institutional support, which reduced strategic coherence and undermined effective collaboration, which was “particularly problematic” in long-term competition with China, the report said.

As for the current arms transfer system, it said, the US was too slow and bureaucratic, with inconsistent guidance and rigid barriers to co-development, co-production, technology transfer and timely delivery under “complex and opaque” regulatory frameworks.

According to a 2023 Government Accountability Office study, the defence department did not deliver 75 per cent of equipment, construction and training programmes to allies as scheduled, and the evaluations of partners’ ability to absorb and sustain training was “not high quality”, leading to the transfer of unsuitable or unreliable equipment.

“The results are potentially catastrophic,” the report said, adding that allies might doubt US commitments to their security, become less convinced about US threat projections and its willingness to support them in a crisis, and thus be “more receptive to overtures” from China and Russia.

Foundational pillars of collective security strategy, arms sales and defence industrial cooperation must be reframed, which required not only regulatory reforms but also “a cultural shift” within the US government and defence establishment towards “viewing partners as contributors to shared deterrence, not merely as customers or risks to be managed”, the report said.

A US that neglected to proactively manage its alliances might wake up to a world in which “traditional American allies and more neutral countries also start working together – but against the United States”, it warned.