Austria’s economy likely to suffer due to new US tariffs

Tariffs could lower Austria's economic growth by 0.2 percentage points in 2025 and 2026

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According to the Vienna Institute for International Economic Studies (wiiw), Austria's gross domestic product (GDP) could fall by 0.09 percentage points due to the new tariffs.

The Institute for Advanced Studies (IHS) expects an even steeper decline. Foreign trade expert Klaus Weyerstrass told APA that tariffs could lower Austria's economic growth by 0.2 percentage points in 2025 and 2026.

He also noted that a global economic slowdown was compounding the effect. Economist Julian Hinz of the Kiel Institute for the World Economy went further.

His study estimates a 0.38 per cent drop in Austria's GDP in the first year following the tariffs.

"This is new territory," Hinz told Der Standard.

"The models are built to simulate such massive changes in customs policy."

In the meantime, the European Commission has made it clear that it will not remain passive.

Commission President Ursula von der Leyen described the tariffs as a "serious blow" to the global economy" and confirmed that the EU was finalising its "first package of countermeasures."

The EU has developed an extensive set of retaliatory tools, stored - quite literally - in a secure room at the EU Council. These include tariffs on high-profile US exports like Harley-Davidson motorcycles, jeans and bourbon whiskey.