The US government huffed and puffed over the News Bargaining Incentive (NBI) during its design phase. Now the legislation has passed into law, experts say retaliation is almost certain – but Australia would be able to withstand the blow. 

The NBI is regarded by the Australian news media as a potential lifeline.  

But the Trump administration has likened it to “foreign extortion”, backing the tech giants who have called on the US government to “be prepared to use all available trade tools to facilitate” removal of the legislation. 

Currently immersed in a trade war with Canada, and a deadlier war with Iran, the US government has been relatively quiet in the initial weeks following the passing of the NBI.  

But University of Sydney Business School taxation law lecturer Fei Gao tells PIJI that won’t last long. 

“Any minute now, [Trump] will try to threaten Australia [with] these reciprocal tariffs,” she says. 

“It’s coming.” 

When that time comes, Australia Institute International & Security Affairs Program director Emma Shortis says Australia has enough strength in its economy and allies to see its goals through. 

Threatening pattern 

Reciprocal tariffs – both threatened and enacted – have been a key feature of US foreign policy throughout President Donald Trump’s second term.  

They have already been used in attempts to influence Australian policy on issues ranging from beef imports to the Pharmaceutical Benefits Scheme. 

Despite their label, Gao says the Trump administration’s tariffs are not ‘reciprocal’, but are instead wielded to threaten other countries into submission. 

In 2025, Canada rescinded its digital services tax on the eve of implementation after Trump threatened to cut off trade talks. This year, Gao points to India and New Zealand cutting existing and planned digital services taxes, respectively, to ease pressure from the US. 

In June, Trump threatened to place a 100 per cent import tariff on any European country that imposes a tax on digital services. Although he has yet to follow through, the UK quickly signalled it was open to discussion on its existing digital services tax. 

The Australian government has been careful to avoid labelling the NBI a digital services tax, but to tech companies, and experts such as Gao, there are strong similarities. 

The US raised baseline tariffs on goods from 60 countries, including Australia, to 12.5 per cent in July. 

Some products, including Australian beef and pharmaceuticals, were exempted – but Gao anticipates these exemptions could be endangered if the US chooses to pressure Australia to walk back the NBI. 

Australia can stand up for itself 

Shortis describes the Australia-US relationship as “deeply unhealthy”. 

She says the Australian government’s “relentless” focus on seeing the AUKUS deal through has led to unwillingness to stand up to the Trump administration’s “attacks on democracy at home and internationally”. 

“There’s this sense that … if you don’t make [Trump] angry, if you do your best to keep your head down and avoid his wrath, that you can ride [his administration] out,” she says. 

“I think that’s really dangerous because of the damage Trump is doing, but also because it’s not true.  

“It doesn’t matter what you give him; it’s never going to be enough.” 

The Australian government estimates that if digital platforms make “reasonable” commercial deals under the NBI, news media could benefit by up to $250 million. If the platforms decide not to enter those agreements, resulting charges could raise up to $400 million annually. 

For tech companies who record billions in profits every year, Shortis says the amount of money the NBI is expected to raise is “minimal”, but these companies and the US government hope by extinguishing the NBI, they can avoid setting a “precedent” for other countries to follow Australia’s lead. 

Although retaliatory US tariffs could pose a threat to Australia’s economy and security, Shortis Australia must take the risk – and the country is more “resilient” than it gives itself credit for. 

“Australia often underestimates our power and our agency when it comes to our role in the world, and actually we are entirely capable of standing up for ourselves as a nation against these kinds of attacks,” she says. 

“There’s often this sense that Australia is doing this alone, but the Trump administration is doing this to all of the United States’ historic allies [such as] in Canada, in the European Union; working together with those allies offers [Australia] a significant buffer.” 

Sezen Bakan