Trump’s customs club is also left to decent traces in the domestic economy. As the Institute for Higher Studies announced on Thursday, domestic economic growth is reduced by another 0.2 percent.
The new customs package of US President Donald Trump is expected to deepen the economic decline in Austria this year. The rates would reduce economic growth in Germany in 2025 and 2026 by around 0.2 percentage points, a first provisional estimate of the Institute for Higher Studies (IHS). Last week the IHS predicted a decrease in the economic output for Austria by 0.2 percent in 2025.
With the new American rates, the expected decrease in the local gross domestic product (GDP) will be 0.4 percent this year, according to the provisional IHS model calculation. The deficit of the state budget also increases a greater fall in the economic output. Not only the American rates, but also the cooling of the global economy, Austria, said that the IHS external retail economist Klaus Weyerstrass to APA. In January, the Global Currency Fund -growth in the global economy of 3.3 percent in 2025 predicts. Weyerstrass expects American rates to grow by approximately 0.2 to 0.3 percent of lower worldwide economic growth and in 2026 less growth with 0.5 percentage points.
Possible stream of goods from Asia due to the American customs package
In Europe, the IHS -External trading economist “hardly” expects an effect on inflation. However, there will be a negative economic impact for Europe due to the diversion of goods flows by the American customs policy, such as an extra stream of goods from Asia. For the United States, Weyerstrass expects higher inflation and lower economic growth due to less consumption and troubled consumers. The customs package announced by US President Trump would increase the average American customs at the highest level since the 1940s, the IHS external retaileconomer referred to data from the American tax.
Wiiw: Recession will deepen
From the perspective of the Vienna Institute for International Economic Comparative (Wiiw), the tightening of the American customs policy will also hit the Austrian economy. “It can be expected that the recession will deepen,” says Robert Stehrer, the Wiiw -Retail economist, in an interview with the APA. With rates of 20 percent, the EU export would fall to the United States, which would also influence the Austrian exporters. “This is another blow to the economy in the middle of negative growth.”
According to Stehrer, EU exports to the US are currently accounting for around 7 percent of total European exports. For the Austrian producers the question arises whether they can find other sales markets for their products. However, US measures may not have a negative effect on inflation in the European Union. “If there is an attempt to break down products in Europe because of the rates, this should even be more inflation,” said the scientific director of the Wiiw.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
