In a speech aiming to claw back votes from the far-right Freedom Party (FPÖ), Christian Kern said his government would ask the EU to allow Austrians to be given priority for jobs over European citizens.
He pledged that his centrist government would be “changing course” with a 10-year plan covering issues including immigration and the economy.
German-language newspapers accused him of “mimicking” Donald Trump after he used the slogan: “Let’s make our country strong again.”
Mr Kern said he would push for measures to restrict practices under which companies can send eastern European workers to Austria without paying full taxes.
“We have a situation where these eastern European countries are exporting their joblessness to Austria,” he added.
"I thought to myself - is this Kern or Trump speaking about Mexico?" one commentator wrote.
His plan, which stretches beyond when the coalition's term expires in autumn 2018, includes a push within the EU for candidates in Austria to be given priority for jobs in sectors that are particularly under pressure.
The far-right FPÖ, whose candidate achieved a record score in last year’s presidential election, is leading opinion polls with support of roughly a third of Austrians, capitalising on concern over immigration and rising unemployment.
Many of its new voters are former supporters of Mr Kern's Social Democrats (SPÖ) who have been left frustrated by the coalition with the conservative People's Party, an alliance marked by frequent bickering that is widely seen as ineffective.
The Chancellor dismissed speculation that the fragile alliance could collapse, forcing a snap parliamentary election.
“Those who no longer believe in us, those who are disappointed by us, those who are perhaps angry, I hear your message and I understand your disappointment,” he said. “From today we will change course.”
Mr Kern was speaking to hundreds of supporters in Wels, the biggest city in Austria run by an FPÖ mayor and a former SPÖ stronghold.
His 146-page plan covered a range of issues including healthcare, raising the minimum wage and punitive taxes for companies who register profits outside of Austria.
It also called for “200,000 extra jobs” alongside greater public investment and measures to help start-ups.
Refugees march from Hungary to Austria
Refugees march from Hungary to Austria
1/10 Refugees march from Hungary to Austria
Migrants walk in a long line along the highway near Budapest, Hungary, Friday, Sept. 4, 2015
2/10 Refugees march from Hungary to Austria
Migrants walk on the railway tracks between Bicske and Szar, some 40 km west of Budapest, Hungary, 04 September 2015
3/10 Refugees march from Hungary to Austria
The destination for most of those walking is reportedly Austria
4/10 Refugees march from Hungary to Austria
Most refugees have come to Hungary through the southern border with Serbia
5/10 Refugees march from Hungary to Austria
People walk in a long line along the highway near Budapest, Hungary
6/10 Refugees march from Hungary to Austria
Over 150,000 people seeking to enter Europe have reached Hungary this year
7/10 Refugees march from Hungary to Austria
Refugees walk along Budaorsi Street on their way out of Budapest
8/10 Refugees march from Hungary to Austria
Refugees hold up an EU flag as they on the highway out of Budpest
9/10 Refugees march from Hungary to Austria
Refugees exit Budapest
10/10 Refugees march from Hungary to Austria
Hundreds of migrants walk after leaving the transit zone of the Budapest main train station
The nationalist FPÖ, whose representatives have met Mr Trump's team, runs under the slogan “Austria First”. It opposes immigration, the EU, same-sex marriage, Islam and any perceived threat to Austria’s “cultural identity”.
Its populist agenda has drawn surging support since the start of the refugee crisis, which has seen hundreds of thousands of migrants pass through Austria.
The head of the governing coalition’s junior party has called for further limits on the number of people allowed to apply for asylum in the country, after a cap was imposed in January 2016.
Reinhold Mitterlehner, the head of the conservative People's Party, said he wanted to halve the existing limit of 35,000 asylum applications in a year to around 17,000.
He claimed the move was necessary to fight sexual assaults and criminality, drawing criticism from left-wing politicians and human rights groups.
Under current rules, if the asylum cap is reached an emergency decree enters into force allowing authorities to turn away refugees at the Austrian border.
Additional reporting by ReutersReuse content