© Getty Images/Unsplash
11.04.2025
Europe's New Approach to Trade Policy
WIFO Research Brief: Diversify, Don't React
The new trade policy of the USA confronts the EU with growing trade policy uncertainty. Against this backdrop, this research brief by Hendrik Mahlkow (WIFO), Sonali Chowdhry (DIW Berlin) and Julian Hinz (IfW) analyses scenarios the EU can pursue in response to protectionist tendencies.
Based on simulations with the KITE model, three scenarios are analysed:
- a sectoral trade agreement with the USA,
- the deepening of existing free trade agreements and
- the conclusion of new free trade agreements with partners such as India, Australia, or Mercosur.
It can be seen that while an agreement limited to the USA has hardly any macroeconomic effects, both scenario 2 and scenario 3 lead to robust GDP and export growth – particularly in knowledge-intensive sectors. The strongest effects, however, arise from a combination of both strategies, although the effect for Austria would be somewhat smaller because Austria's economic structure is more oriented towards existing EU trading partners and traditional markets. Trade diversification is thus not a technical detail, but a central instrument of European resilience policy.
Publications
WIFO Research Briefs
10.04.2025
Finalization: April 2025
Specialist publication: WIFO Research Briefs
Please contact
Further news
Video: Research Seminar with Nikolaus Kowall
30.04.2025
Results of the WIFO-Konjunkturtest (Business Cycle Survey) of April 2025
29.04.2025
Austria's GDP Falls by 0.23 Percent in the Short-term and by 0.33 Percent in the Medium- to Long-term
04.04.2025
Results of the WIFO-Konjunkturtest (Business Cycle Survey) of March 2025
28.03.2025
Event postponed due to illness: WU matters. WU talks. - Keynote by Sigmar Gabriel
26.03.2025
Video: Research Seminar with Mario Liebensteiner
17.03.2025
Results of the WIFO-Konjunkturtest (Business Cycle Survey) of February 2025
27.02.2025
Economy of the USA Also Affected – Slight GDP Decline in China
04.02.2025
Results of the WIFO-Konjunkturtest (Business Cycle Survey) of January 2025
31.01.2025
Video: Research Seminar mit Aleksandra Parteka
27.01.2025
Results of the WIFO-Konjunkturtest (Business Cycle Survey) of December 2024
08.01.2025
Recent Study for FWF and Opinion Piece in the Daily Newspaper Kurier
03.12.2024
Results of the WIFO-Konjunkturtest (Business Cycle Survey) of November 2024
28.11.2024
WIFO Study in Cooperation with Joanneum Research Analyses Performance and Identifies Policy Options
25.11.2024
Video: Research Seminar with Julian Hinz
25.11.2024
The Machinery and Equipment Sector Could Particularly Benefit from Easier Market Access
21.11.2024
WIFO and Kiel Institute Publish Policy Brief on US Trade Policy after 2024
03.11.2024
Results of the WIFO-Konjunkturtest (Business Cycle Survey) of October 2024
31.10.2024
Michael Peneder and Gabriel Felbermayr listed in the Stanford Ranking 2024
29.10.2024
FIW Publishes Annual Report Update
14.10.2024
