Tariff Pause Between the USA and China Brings Modest Export Gains for Austria. But Global Uncertainty Persists

Hendrik Mahlkow

13.05.2025

Tariff Pause Between the USA and China Brings Modest Export Gains for Austria

But Global Uncertainty Persists

The announced 90-day tariff pause between the United States and China is likely to lead to a short-term economic easing – including for Austria. Simulations using the WIFO's KITE trade model suggest that Austrian exports to the USA could rise by around 1.4 percent under the de-escalation scenario. This is driven by a projected relief for the US economy, which may temporarily increase demand for intermediate and capital goods from Europe.

At the same time, import prices in Austria are expected to ease slightly: the price level falls by about 0.44 percent according to the model. This development could help dampen ongoing inflationary pressures. However, the simulations also show that global trade disruptions have not fully subsided: Austria's overall economic output declines slightly by 0.18 percent despite the export boost – a sign that indirect effects via third markets remain in play.

"Austria is largely spared from the direct consequences of the US-China trade conflict but benefits modestly from the short-term relief," says WIFO trade economist Hendrik Mahlkow. At the same time, he urges policymakers to use this window to strengthen Europe's and Austria's external economic resilience. The coming months remain volatile – a return to stable global trade rules is not yet in sight.