Introduction
Since the United States is among the largest market players in the world, its economic policies are typically perceived as the factor influencing global trade. The extent to which the decision of the U.S. authorities to go protectionist affects European countries presents an important question. In the case of small- and medium-sized enterprises (SMEs) in Austria, the impact of the policy shift does not seem to be pronounced, which is manifested in statistical and survey data.
Austria’s SMEs and Protectionism
Under the presidency of Trump, the United States is going to rely more on protectionist strategies. It is regarded as a response to the years of free-trade policies “responsible for the collapse of the American manufacturing industry” (Allen 2016, para. 3). The implementation of measures that create barriers to free trade and prevent further loss of jobs in manufacturing typically impacts all trade partners of a country (Albaum, Duerr & Josiassen 2016; Dicken 2014). However, the size of such effects may vary depending on multiple factors, including the company’s type, which is critical in the case of Austria.
Compared to SMEs or businesses that employ between 10 and 250 people, large companies in Austria are more likely to suffer losses resulting from the revival of protectionism. As Delis (2018) argues, the tariffs on aluminium and steel recently announced by the U.S. will impact the majority of EU countries. Being responsible for 9% of EU exports of aluminium to the U.S., Austria is at risk, but many of its largest aluminium enterprises are not SMEs (Delis 2018, para. 7).
Exposure to exports into the U.S. is a decisive factor, and large aluminium producers in Austria may experience difficulties. Importantly, smaller businesses in Austria that actively use large exporters’ products will benefit from the situation due to price drops (Delis 2018). However, since SMEs are the core of Austria’s export-dependent economy, they will be affected under any circumstances.
If the U.S. policies had a heavy impact on Austrian SMEs (more than ninety per cent of all companies in the country), it would be reflected in economic statistics. As is clear from statistical data on Austria’s foreign trade, the country still relies on exporting goods to EU countries even though the U.S. is among its key trading partners (Statistik Austria 2019). Protectionist policies are aimed at turning economic rivals into less competitive exporters of goods (Robinson & Thierfelder 2019). Austria experienced persistent trade deficits from the 1970s to 2003 and from 2008 to 2015, but the U.S. economy was not protectionist during those periods (CEIC 2019). Therefore, it is doubtful that the business conditions of Austrian SMEs have changed dramatically due to the U.S. policy shift.
Apart from the use of statistics, the effects of the U.S. economic policies on Austrian SMEs can be evaluated with the help of survey data. The study of payment practices conducted by Atradius (2017) focuses on current challenges reported by the representatives of Austrian B2B businesses working with domestic or foreign partners. According to it, only one-fourth of respondents (with less than half representing SMEs) are worried about the potential payment delays linked to Asia’s economic slowdown and protectionism in the U.S. (Atradius 2017). With that in mind, the discussed policy shift causes negative expectations in some Austrian companies, but there are no facts showing that its effects are already large.
Conclusion
To sum it up, despite publicly raised concerns, there is no solid evidence proving that Austrian SMEs experience significant difficulties as a result of protectionist policies in the U.S. For instance, the periods of Austria’s unattractiveness in the global market are not aligned with new trade policies presented by the U.S. Also, business owners in Austria do not report actual problems caused by the U.S. policy changes.
Reference List
Albaum, G, Duerr, E & Josiassen, A 2016, International marketing and export management, 8th edn, Pearson Education, Harlow.
Allen K 2016, ‘Trump’s economic policies: protectionism, low taxes and coal mines’, The Guardian.
Atradius 2017, Atradius payment practices barometer. International survey of B2B payment behaviour Austria – key survey results. Web.
CEIC 2019, Austria trade balance.
Delis A 2018, ‘How US tariffs will affect different parts of the EU’, The Conversation.
Dicken, P 2014, Global shift: mapping the changing contours of the world economy, 7 edn, Guilford Press, New York, NY.
Robinson, S & Thierfelder, K 2019 ‘Global adjustment to US disengagement from the world trading system’, Journal of Policy Modeling, pp. 1-28.
Statistik Austria 2019, Der Außenhandel Österreichs. Web.