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Australia's draft News Bargaining Incentive (NBI) has drawn criticism from the US where the tax on digital platforms is seen as treating American companies unfairly.
President Trump is expected to sign a memorandum directing the Office of the US Trade Representative to propose retaliatory measures, including tariffs, against countries that impose digital taxes on US companies.
"President Trump is committed to defending America's leading technology sector from digital services taxes and other forms of foreign extortion," said Kush Desai, White House spokesperson.
The NBI has also been named in the 2026 National Trade Estimate Report under the section Service Barriers: "The United States continues to monitor this issue to ensure that US companies are not unfairly targeted."
Prime Minister Anthony Albanese has stated Australia will proceed with the legislation despite opposition.
"We're a sovereign nation and my government will make decisions based upon the Australian national interest. We do that right across the board," said Albanese.
The legislation, now available for public consultation, addresses a gap in the existing News Media Bargaining Code that has allowed digital platforms to avoid payments for news content.
Under the NBI digital platforms, including social media and search services, would be encouraged to enter commercial deals with eligible news publishers, with offsets available to reduce their liabilities.
Platforms that choose not to enter deals would face a levy of 2.25% on their Australian revenue, provided it exceeds $250 million.
Revenue collected would be redistributed back into the news media sector.
The Computer and Communications Industry Association (CCIA), an American trade group representing major US firms including Meta, Google, Apple, Amazon, Uber and Pinterest, issued a formal statement of opposition to the Australian legislation.
"The Computer & Communications Industry Association strongly opposes this proposal and urges the US government to publicly and forcefully challenge the draft measure, including through targeted trade remedies, if legislation passes," the CCIA statement said.
The association said the legislation was unfairly targeting American companies.
"The Incentive is discriminatory in both design and effect, singling out predominantly U.S. firms while distorting digital markets and undermining open internet principles."
CCIA president and CEO Matt Schruers said the legislation violated the Australia-United States Free Trade Agreement.
"Australia's proposed News Media Bargaining Incentive is a thinly veiled discriminatory tax on US digital services that is inconsistent with its commitments under the Australia-United States Free Trade Agreement," said Schruers.
"The United States should make clear its opposition to such a measure and be prepared to use all available trade tools to facilitate its removal."
Google and Meta have also voiced their opposition to the legislation.
"While we are currently reviewing the draft legislation, we have been clear: we reject the need for this tax," said a Google spokesperson.
"It ignores the fact that Google already has commercial agreements with the news industry, misunderstands how the ad market changed and mandates payments from some companies while arbitrarily excluding platforms like Microsoft, Snapchat and OpenAI."
Meta said news organisations received value from posting on its platforms.
"News organisations voluntarily post content on our platforms because they receive value from doing so," said a Meta spokesperson.
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