“We understand that. We totally acknowledge that. And we knew that would be the case.
“And it was not possible for us to be able to discuss such secure issues in relation to our dealings with other countries at the time.”
Mr Morrison is in the US for meetings with President Joe Biden and other members of the so-called Quad alliance - India and Japan - but his trip is being overshadowed by French fury at the decision.
Australia last week cancelled a $90 billion contract to buy diesel-electric French submarines and instead acquire nuclear-powered technology from the United States and United Kingdom.
The agreement was secured as part of a new defence pact between the US and UK, known as AUKUS.
The AUKUS allies have insisted that the diplomatic fallout won't affect their longer-term relations with France, which has recalled its ambassadors from the US and Australia over the decision.
Mr Biden is expected to speak with French President Emmanuel Macron by telephone in the coming days to address France’s disappointment at the submarine contract being scuttled.
But Mr Morrison has indicated there will be no such “opportunity” for him to have a similar conversation for now.
In a telephone call on the way to New York, Mr Morrison did, however, speak with Indonesian President Joko Widodo to ease his concerns about a new arms race in the Indo-Pacific.
The diplomatic fallout from the decision continues to take hold in Europe with concerns the rift could stall negotiations on an Australia-EU free trade agreement.
EU Commission president Ursula von der Leyen weighed into the row on Monday, saying France had been treated unacceptably.
“One of our member states has been treated in a way that is not acceptable,” Ms von der Leyen told CNN.
“There are a lot of questions that have to be answered.”
Bernd Lange, who chairs the European Parliament's trade committee has also warned Australia's submarine decision had damaged trust and was seen as an attack on European interests.
"Some members could ask for more safety nets, for more safeguards in such agreement. So I guess the dialogue and the negotiation will take more time," he told ABC radio.
Representatives from the 27 European Union nations were meeting on Monday night (Tuesday morning AEST) in New York with concerns around the submarine deal expected to be discussed.
Australian Trade Minister Dan Tehan is due to travel to Brussels next month to continue negotiations around the EU free-trade deal.
Mr Morrison's first meeting with Mr Biden during the visit is expected to come on the sidelines of the United Nations General Assembly on Wednesday.