France said it had been betrayed by the U.S. after being pushed out of a multibillion-dollar deal to supply submarines to Australia and warned that the move would undermine its plans for countering the influence of China in the Pacific.

       French Foreign Minister Jean-Yves Le Drian on Thursday called the U.S. move to step in a “stab in the back." President Biden on Wednesday announced a new security pact with Australia and the U.K. that would include a long-term deal to build nuclear submarines for Australia. Australia on Thursday confirmed it was withdrawing from the French contract.

       “This brutal, unilateral and unpredictable decision reminds me a lot of what Mr. Trump used to do," Mr. Le Drian said. “I am angry and bitter. This isn’t done between allies."

       The dispute over the submarine contract is shaping up to be one of the most bitter trans-Atlantic fights of the first year of the Biden administration. Mr. Biden spent his first months in office dialing down tension with Europe on issues ranging from trade to climate change where Europe had clashed with President Trump.

       News of the ruptured contract landed as the European Union laid out its plans to deepen its influence in Asia, including a beefed up security and naval presence designed to ensure freedom of navigation in the South China Sea.

       While the strategy aims to open up new trade and export markets in the region and reduce Europe’s economic and supply-chain dependence on China, it was also pitched as Europe’s effort to work with democratic partners like the U.S., Japan, India and Australia to respond to China’s growing assertiveness in the region.

       In addition to seeking a permanent naval presence in the region, the EU plans under the strategy to step up its transport, energy and digital projects in the region to offer alternatives to China’s Belt and Road initiative.

       As Europe’s premier naval power, France is key to the new strategy. On Thursday, Mr. Le Drian said France’s plans to build a coalition in the region against China, including India and Australia, were shaken by the decision to step away from the contract.

       “We established a relation of confidence with Australia. This confidence is betrayed," he said.

       The Australian submarine deal, dubbed the “contract of the century" in the French media, was signed in 2016 and worth tens of billions of dollars over the coming decades. The contract called for France to build nonnuclear submarines for Australia and transfer some of that technology. Australian engineers were already working in the shipyards of Cherbourg in the north of France.

       Australia began to have second thoughts about the contract in recent months.

       Australian Prime Minister Scott Morrison said he had raised concerns about whether conventional submarines would be able to address heightened security tensions in the Asia-Pacific region to Mr. Macron at a dinner in late June.

       When Australia selected French military shipbuilder DCNS Group in 2016, building and operating a nuclear-powered submarine wasn’t an option, Mr. Morrison said.

       “The decision we have made to not continue with the Attack class submarine and to go down this path is not a change of mind, it’s a change of need," said Mr. Morrison.

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       Since the Biden administration came into office, the EU and the U.S. have moved to strengthen coordination on the challenges China poses, developing a top-level Transatlantic Dialogue on China and setting up a trade and technology council to help Europe and the US better compete with China in developing and protecting critical and emerging technologies.

       Yet the US-led security pact underlines diverging trans-Atlantic approaches to China and points to a lack of confidence in Washington that the U.S. can enlist Europe as a reliable partner in its growing confrontation with Beijing.

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