Washington: The Trump administration has outlined serious concerns about the Albanese government’s new local content rules for streaming platforms and the “unfair” Pharmaceutical Benefits Scheme, in an escalation of US trade grievances against Australia.
The United States Trade Representative’s annual report, released on Tuesday evening (US time), adds several items to the list of trade “barriers” with Australia, chiefly concerning government interventions in the market that would largely impact American tech companies.
Of particular concern to President Donald Trump’s top trade officials is Labor’s move last year to require major streaming services to invest at least 10 per cent of their total Australian expenditure, or 7.5 per cent of Australian revenue, on local drama, documentary, children’s or arts content.
“US industry has expressed concern that the measure employs a narrow, outdated definition of Australian content and will distort important investment and production decisions,” the trade report said. “The United States has raised serious concerns regarding this issue and continues to monitor it.”
The report noted the US’ goods trade surplus with Australia decreased nearly 75 per cent in 2025 to $US4.6 billion ($6.65 billion), while the services trade surplus shrank by 5.5 per cent.
It also introduced a new section on the PBS, based on complaints from the US pharmaceutical industry that Australia “significantly undervalues American innovation through unfair drug pricing practices”.
Canberra was accused of using “slow and outdated monetary thresholds in its valuation process, leading to artificially low prices for innovative therapies” when setting prices for new medications.
Furthermore, it criticised the PBS for mandating price cuts for new drugs after a certain period if no generic or biosimilar competitor entered the market.
“These price cuts are applied without considering inflation, production costs or the ongoing therapeutic value of the medicine,” the USTR report said.
“Furthermore, Australia’s Risk Share Arrangements (RSAs) – with expenditure caps and a clawback mechanism, requiring drug manufacturers to reimburse the government for up to 100 per cent of expenditures exceeding the cap – shift financial risks to the manufacturers, including US pharmaceutical companies.”
Trump has accused other countries of free-riding on American innovation with subsidy schemes that cut the costs of medication, and demanded American consumers are offered the same prices as people elsewhere.
The Australian government has acknowledged the shift in US policy under Trump, saying it is in talks with the administration but pledging to protect the PBS.
Prime Minister Anthony Albanese’s social media ban for children – which other nations are now exploring – was only lightly criticised in the new report.
“The United States continues to monitor enforcement of this [law] to ensure that US companies are not unfairly targeted,” it said.
The USTR said it was also monitoring the next steps of the News Media Bargaining Code, a mechanism aimed at forcing big tech firms to pay news outlets for the use of their content on social media platforms.
Albanese had intended to replace the voluntary system – including many lapsed agreements – with a mandatory scheme, but this was delayed amid Trump’s tariff threats and ongoing trade talks with the US.
The Australian Financial Review reported last year that US Deputy Secretary of State Christopher Landau had directly raised concerns about the local content rules with Australian ambassador to the US Kevin Rudd – who will be replaced in coming weeks by defence department secretary Greg Moriarty.
While the grievances listed in the report are familiar to the Australian government, their formalisation in the document suggests the Trump administration will keep pursuing them in the course of ongoing trade talks.
The federal government did not immediately respond to a request for comment.
Health Minister Mark Butler has previously said the government wants Australians to pay less for medicine. “That means we’re going to have to continue to press the case for free trade with our trading partners, particularly the US,” he said. The PBS was “an utterly core part of our agenda”.
And Arts Minister Tony Burke has said local content obligations were necessary to guarantee that streaming services told Australian stories and not have it “drowned out” by foreign-made content.
The US Trade Representative, Jamieson Greer, was a keynote speaker at last month’s superannuation summit at the Australian embassy in Washington, where he said the Trump administration’s approach to tariffs would not change despite the Supreme Court setback.
Greer told the audience his office was open for business but: “If your point is ‘take down all the tariffs’, we’re not going to get along.”
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Michael Koziol is the North America correspondent for The Age and Sydney Morning Herald. He is a former Sydney editor, Sun-Herald deputy editor and a federal political reporter in Canberra.Connect via X or email.