Trump's Tariffs on EU Products Would Also Hit Austria Hard

"The USA was a bright spot in a very gloomy economic situation," said Wifo chief Gabriel Felbermayr on Tuesday evening on "ZiB2". In general, the EU would be three times as affected by a trade war as the USA.

Significant Losses for Mexico and Canada Threatened by Trump's Tariffs

The trade tariffs already imposed by the Trump administration against China, Canada and Mexico, but partially suspended, are likely to lead to economic burdens in North America and global growth dampeners, according to an analysis published by Wifo on Wednesday. According to the calculations, the tariffs imposed on imports from China and the Chinese countermeasures have led to a slight decline in Chinese GDP (-0.16 percent) and a negative effect on the US economy (-0.11 percent). The consequences of the additional US tariffs on all imports from Canada and Mexico, as well as the countermeasures of these countries, which have been put on hold for the next 30 days, are more drastic. If these tariffs hold, Mexico would be hit with a decrease in real GDP of minus 4.6 percent, while Canada would also have significant losses to record with minus 2.97 percent.

Trump's Tariffs Also Hit USA

In the Wifo scenario, the USA itself experiences a decline of 0.45 percent, as higher import costs make production more expensive and consumer prices rise. "The economic consequences of this escalation are significant and could lead to deep disruptions in North American trade relations in the long term," explained Hendrik Mahlkow, trade expert at Wifo. The German economy, which is closely intertwined with Austria, must also expect negative consequences from the tariffs on imports from Canada, Mexico and China. In the event that the tariffs on imports from Mexico and Canada do come, the German Economic Institute (IW) expects that German economic performance in 2026 will be around 0.4 percent lower.

(APA/Red)

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