Australia said on Wednesday it sees no risk to its relationship with the United States after reports that the Trump administration criticized Canberra's plans to target social media algorithms, which critics say would curtail free speech.
On Tuesday Australia's center-left Labor government said social media users would be given the choice to opt out of algorithms under draft legislation, effectively allowing them to curate their own feeds.
Social media companies face fines of up to A$109.2 million ($79 million) for non-compliance with the law.
The Australian Financial Review reported on Wednesday, citing White House spokesperson Kush Desai, that President Donald Trump had "unequivocally warned trading partners against imposing digital services taxes, fines, and other forms of extortion on America's leading technology sector."
Desai added, "The administration remains committed to raising these issues with our trading partners."
Communications Minister Anika Wells told News24 Australia on Wednesday that US officials had not contacted her office over the proposed law and rejected the suggestion that her government's social media reforms amounted to extortion.
Prime Minister Anthony Albanese said on Tuesday that his government decides its policies based on Australia's national interest, insisting his relationship with President Trump is "very good" and that the two leaders would meet in New York later this month on the sidelines of the UN General Assembly.
Australia's efforts to regulate mostly US-based tech firms have emerged as a flashpoint under the current Trump administration.
A US congressional committee has called for Australia's internet regulator to testify about what it has described as a regime of censoring American free speech, citing attempts to have Elon Musk's X remove certain posts.
The regulator has not yet indicated whether she will comply.
Trump also opposes digital services taxes on US tech giants and has threatened tariffs on countries that pursue them.
Under an Australian law passed this year, big tech companies can be taxed 2.25% on their local annual revenue if they fail to negotiate deals to pay local media outlets for news shared on their platforms.
