Donald Trump’s 'revenge tax' making investing in the United States 'less attractive', AMP's My Bui declares

The controversial section 899 of Trump’s “big beautiful bill” allows the US to implement “revenge taxes” on nations his administration believes unfairly treats US firms – such as tech giants Meta and Alphabet.

This could mean Australians are forced to pay upwards of 20 per cent more tax on US investments if the bill is approved as the Australian government looks to force tech giants to pay for local news through the media bargaining incentive.

Many in Australia’s $4.2 trillion superannuation system have expressed concerns about diminished returns if the legislation passes as hundreds of billions of dollars of members’ funds is invested in the US.

AMP economist My Bui said the changes will make the US a “less attractive” investment destination and that Australian super funds are rethinking how they will deploy their capital in the future.

“We are definitely at an inflexion point of a regime change when the US starts to look a bit more inwards rather than outwards,” Ms Bui said on Sky News’ Business Now.

“This has prompted investors to rethink putting more capital into the US.

“Maybe it is a more attractive time to actually put money into Aussie infrastructure or European equities. Both of those have basically outperformed US equities since the beginning of the year.”

She noted there continued to be a “rationale” for investing in the US, considering the greater capacity for corporate profit growth and higher productivity, but argued the proposed tax change ultimately hurt America.  

“Section 899 taxes will make it much less attractive and probably will make super funds in Australia rethink about deploying capital in the future,” Ms Bui said.

Treasurer Jim Chalmers on Wednesday told reporters he had discussed section 899 with US Treasury Secretary Scott Bessent and made Australia’s case against the looming tax.

“I’ve engaged a lot with Australian investors over the course of the last couple of weeks on their concerns,” Mr Chalmers said.

“I was able to represent them and raise their concerns directly with US Treasury Secretary Bessent and I know that the Treasury Secretary is very focused on these issues as well.

“We hope that they can be resolved. We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress.”

Investors have expressed caution about investing in the United States over growing uncertainty surrounding section 899.

AMP’s chief economist Shane Oliver earlier this month said section 899 of the bill, alongside other economic policies by the Trump Administration, “called into question ‘US exceptionalism’ and its ‘safe haven’ status”.

The Future Fund chair Greg Combet also expressed concerns about the bill where he argued the US was hurting itself by thwarting investment through section 899.

“Section 899 of the Bill will potentially and dramatically escalate tax rates for Australian institutional investors like the Future Fund,” Mr Combet said in a speech to the Committee for Economic Development of Australia earlier this month.

“In combination these policies and dynamics are making the US a more risky and uncertain investment destination.”

Two versions of the bill currently exist: one from the US house and one from the senate.

Both versions need to be identical before they are shown to Trump for approval.

Pitcher Partners said if the US President greenlights the tax, Australia will have to wind back laws the US has deemed inappropriate.

“If it does pass, and Australia is identified as a country with tax practices which are subject to the Bill, it will place pressure on the Australian Federal Government to repeal its own laws so that Australia is not an ‘offending’ or ‘discriminatory’ foreign country,” Pitcher Partners said.

“However, as matters stand today, the potential impact of this Bill is certainly something that Australian taxpayers with US interests should keep a close eye on.”