The U.S. is no longer the dominant power in the western Pacific and would struggle to win a conflict against China, according to a new study from an Australian institute.

A combination of overly stretched budgets, underprepared forces and outdated thinking among war planners would undercut America's ability to defeat China, particularly as Beijing invests heavily in particular aspects of its military, a study from the University of Sidney's United States Studies Centre states. It speculates the U.S. could lose a war before it starts if, for example, China were to launch a wide-scale, coordinated missile attack against U.S. and allied bases.

"The United States might fail to deter — or could even lose — a limited war with China, with devastating consequences for the region's future strategic landscape," the study's authors write.

Meeting the challenge will require hard choices that leaders in the U.S. may be unwilling or unable to make, they write, particularly if Washington continues to see itself as the global guarantor of "an expansive liberal order."

"In an era of constrained budgets and multiplying geopolitical flashpoints, prioritising great power competition with China means America's armed forces must scale back other global responsibilities."

The study follows fears from within U.S. defense and political circles in recent months that decades of focus on Middle East terrorism threats and outdated fears about Russia have left America wrong-footed in preparing for a potential conflict with China. The study recommends further relying on traditional allies, including Japan and Australia, though those alliances have strained under the Trump administration's skepticism about such partnerships and insistence that allies contribute more resources and money to working with the U.S.

It points out that Congress has allocated special budgets to help military planners address threats in the Middle East and in Eastern Europe, though no such investment exists for East and South Asia.

Later on Tuesday, President Donald Trump was asked about the study's assertion that China possess a strategic edge over the U.S.

"We could wipe out anything," he said, adding the U.S. has "the most powerful military in the world."

Trump said he believes no country can compare to American military might, and speculated that China would "pay a price they don't want to pay" if the country were to attack U.S. interests.

The study is not the first to highlight such concerns. A commission formed by Congress to analyze the policy document that guides U.S. national security thinking and operations concluded in November that the U.S. is no longer clearly superior to the threats it faces around the world and that it would struggle to win wars against China or Russia.

"U.S. military superiority is no longer assured and the implications for American interests and American security are severe," the National Defense Strategy Commission wrote in its findings at the time. It attributed the weakened defense infrastructure to "political dysfunction and decisions made by both major parties."

China, meanwhile, has found efficient ways to counter or exploit U.S. military weaknesses. Its decision to reform its coast guard as a military service last year raised sharp concern among Pentagon leaders, concerned about the unclear boundary between China's foreign military operations and other encounters – such as its annexation of islands and reefs in international waters – that Beijing could frame as a domestic dispute.

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China has also expanded its soft power influence in the region, investing heavily in small countries around the Pacific Rim, such as Micronesia and Vanuatu, that the U.S. and partner countries consider a pincer movement around territory Beijing wishes to control.

China's recent activities have particularly alarmed officials in Taiwan. The U.S. infuriated Beijing last week by announcing it would provide new fighter jets to the island nation, which China considers a renegade province.

The U.S. on Sunday tested new missiles that were previously banned under a Cold War-era treaty, a move overtly designed to deter Russia but which some believe was also meant to show China that the U.S. is comparably investing in ground-based missiles.