The two nations are the traditional powerhouses of the pool, but Australia have not beaten the dominant Americans' medal tally since the 1956 Games in Melbourne.
A stellar performance at the world championships in Japan last year, where they won more golds than the Americans, raised expectations.
But Taylor, who masterminded Australia's success at the last Olympics in Tokyo where they won nine gold medals and 20 overall, conceded they would be chasing the United States again when the swimming begins at La Defense Arena on July 27.
"I think the Americans are the standard of the sport," he said late Wednesday from Australia's training camp outside the French capital.
"So as far as being the best country, they are and they deserve it, they've got the depths, they've got the performances. As a whole, in every event, they'll have somebody who can get on the podium.
"The respect for the US is huge," he added.
"We want to be as good as them. And so the rivalry probably is more about respect and the fact that we see ourselves as striving to be that good and be that consistently good."
Australia's aspirations rest heavily on the shoulders of heavyweights such as Ariarne Titmus, Kaylee McKeown, Mollie O'Callaghan, Kyle Chalmers and their formidable relay teams.
Taylor said the squad were on track to do as well if not better than in Tokyo, with multiple swimmers capable of producing something special.
"I think we have a pretty comparable team, where we were going into Tokyo as far as our rankings, where we sit," he said.
"These athletes are exceptional trainers, are committed and perform on the world stage so they have earned the expectations I believe and they thrive on that.
"They'll get up and have a crack, don't worry about that," he added. "What we do have is we have a lot of strike power and it's exciting."
