The paper explores the process of constructing the negative image of the Habsburg monarchy in the USA during the first year of WWI. My case study tackles an issue of transatlantic relations from the perspective of wartime propaganda. It is considered as one of the means of shaping the public opinion and influencing the policy decisions. In my presentation I will first evaluate the contribution of different actors involved in this process. Then I will assess the "response" of the Habsburg diplomacy to the propaganda campaign launched against the Danube monarchy. More precisely, I will explore not only the strategy their representatives developed, but will assess whether this strategy achieved its political ends or not. To put it simply, I will assess in what way the anti-Habsburg propaganda campaign in the USA influenced the relations between the USA and Austria-Hungary. In my paper I will rely mainly on the American periodical press, which, as contemporary Hungarian historiography points out, was an important factor in the American foreign policy.