Born in Bludenz, Vorarlberg, Schmidt attended the Stella Matutina Jesuit school in Feldkirch, where he met with the later Austrian Chancellor Kurt Schuschnigg.

He played an important part in the conclusion of the 1936 "July Agreement" of the Austrofascist government of Dollfuss' successor Kurt Schuschnigg with Nazi Germany and in turn was appointed State Secretary of Foreign Affairs.

On 12 February 1938 Schuschnigg under pressure from Hitler elevated Schmidt to the rank of a Federal Minister, a post he held until 11 March 1938, when the chancellor was forced to resign only hours before the invasion of Wehrmacht troops and the Austrian Anschluss to Nazi Germany.

[6] Schmidt played a vital role in the preceding demission of Chief of Staff Alfred Jansa, nevertheless he did not join the Nazi government of Arthur Seyss-Inquart, whereafter he retired from politics.

In 1945, Schmidt was temporarily imprisoned by the Allied occupation forces because of his pro-Nazi attitude and accused of high treason, but was acquitted in 1947.