UniCredit Bank Austria Analysis
Tariffs shock: industrial strongholds particularly affected
- In 2024, Austria exported goods worth EUR 16.2 billion to the USA
- The USA is the second most important export partner after Germany. Regionally, Styria, Upper Austria and Vienna are the most important players in the export of goods to the USA
- The new tariffs could result in additional costs of around 2.4 billion euros, more than ten times the current burden
- Austria's economic output would fall by 0.25 per cent as a result of the planned tariffs - with the greatest losses for Styria at 0.5 per cent and Upper Austria at 0.4 per cent
- Around 10,000 jobs are at risk, almost a third of which are in Styria and Upper Austria respectively
The new import tariffs planned by US President Trump would represent a considerable burden for the Austrian export industry. “The protectionist measures taken by the USA are likely to push Austria's economic output down by 0.25 per cent,” explains UniCredit Bank Austria Chief Economist Stefan Bruckbauer, adding: “The industrially strong federal states will be particularly hard hit. Even though some of the tariffs have now been suspended, the uncertainty remains high and the effects that we expect in our analysis would only become smaller if the tariffs are not imposed.” In addition, the tariffs on steel and motor vehicles remain unchanged at 25 per cent.
Federal states affected to varying degrees
In 2024, Austria exported goods worth EUR 16.2 billion to the USA - an increase of 10 per cent compared to the previous year, despite a general decline in total exports. Pharmaceutical products (+80 per cent compared to 2023) and, contrary to the general trend, machinery exports developed particularly positively.
The automotive sector recorded a decline of -17 per cent. The USA is Austria's second most important export partner after Germany. Regionally, Styria, Upper Austria and Vienna are the main players: together they account for over two thirds of Austrian exports to the USA. The introduction of so-called “reciprocal” tariffs totalling 20 per cent for goods from the EU - consisting of a basic tariff of 10 per cent plus 10 per cent for specific countries - has made Austrian exports considerably more expensive.
Pharmaceutical products are currently still exempt from this, which particularly protects the federal capital of Vienna, whose US exports are heavily dominated by pharmaceuticals. “For the two industrial strongholds of Styria and Upper Austria, we expect economic output to fall by 0.5 per cent and 0.4 per cent respectively as a result of the US import tariffs,” says UniCredit Bank Austria economist Robert Schwarz. The effects are least severe for Vienna, Carinthia and Burgenland, with a maximum economic slowdown of 0.1 per cent. The remaining federal states are in the range of the nationwide decline of 0.25 per cent due to the tariff shock. However, the USA is planning to introduce high import tariffs on pharmaceutical products that are currently still exempt. This would have a particularly negative impact on US exports from Vienna and Tyrol.
Customs duties could increase more than tenfold
According to calculations by bank economists, the trade-weighted tariff rate for Austrian goods exports to the USA in 2024 was 1.3 per cent. According to the US government's plans, the rate would rise to around 16 per cent. Applying the new US tariff regime to Austrian exports of goods from the previous year would increase the price of products by around 2.4 billion euros. The customs duties would thus be more than ten times the previous burden.
Around 10,000 jobs at risk
“The expected slump in Austrian goods exports to the USA threatens around 10,000 well-paid jobs in industry in Austria - almost a third of them in Styria and Upper Austria, with 2,900 jobs at risk in both regions,” Schwarz concluded.
Enquiries:
UniCredit Bank Austria Economics & Market Analysis Austria
Robert Schwarz, Tel.: +43 (0) 5 05 05-41974;
E-mail: robert.schwarz@unicreditgroup.at