Trump’s Tariffs: Impact on Sweden’s Economy

Published: April 4, 2025
Updated: April 4, 2025, 11:47 CET
By Richard Orange

US President Donald Trump’s recent announcement of a 20 percent blanket tariff on imports has created significant concerns for economies around the world, including Sweden. As the third-largest export market for Sweden, the implications of these tariffs could have a noticeable impact on the Swedish economy.

Sweden’s Economic Vulnerability

According to estimates from Sweden's finance ministry, the newly imposed tariffs may trim growth in 2025 by approximately 0.15 to 0.4 percentage points. This adjustment could lower the country’s growth forecast from 2.1 percent to as low as 1.7 percent in the coming year. While these figures represent an unwelcome development, they are not catastrophic.

Sweden's finance minister, Elisabeth Svantesson, indicated during a press conference that the country’s low levels of government debt place it in a stronger financial position compared to many other nations. This stability may help Sweden weather the storm posed by the tariffs.

In an analysis conducted in October, the Swedish National Board of Trade predicted that overall exports to the US would decline by 16 percent in response to the blanket tariff. The recent tariffs may affect sectors differently, but the board's original estimates will need revisiting following Trump’s recent announcements regarding trade rates with specific countries.

Tariff Details and Their Applicability

Trump’s tariffs will take effect in two phases. Starting April 5, a 10 percent tariff will be applied to all imports from various countries, with a blanket 20 percent rate kicking in on April 9. Sweden, as a member of the EU, will face the full blanket tariff. Additionally, Sweden, known for its automobile exports, is also subjected to a 25 percent tariff on cars and car parts, beginning April 9. Notably, Sweden has already been facing a 25 percent tariff on steel imports, affecting its steel production and manufacturing sectors.

Certain goods are excluded from these tariffs, including pharmaceuticals, copper, semiconductors, and specific raw materials for energy production. Major Swedish companies like AstraZeneca and Boliden, which are involved in pharmaceutical and mining operations respectively, stand to benefit from these exclusions.

Moreover, Sweden has coordinated with the EU to exempt particular products from retaliatory tariffs. This includes important assets for industries such as pharmaceuticals and cosmetics.

Jobs and Inflation Concerns

The tariffs could lead to job losses, particularly in manufacturing sectors. For instance, Volvo has announced a potential need to shift some production to the US, which might reduce jobs at their significant facility in Torslanda, near Gothenburg.

Inflation concerns have also become prevalent. Erik Thedéen, governor of the Riksbank, highlighted the possibility that these tariffs could lead to increased inflation. Though Sweden’s current inflation sits close to the Riksbank’s target of 2 percent, the situation remains fluid and warrants attention as the economic implications unfold.

Opportunities Amidst Challenges

While many Swedish companies face challenges due to the tariffs, some may gain from the increased prices brought on by the new trade policies. Companies with production bases in the US, such as SSAB, Volvo, and AstraZeneca, could see profit margins increase due to the tariff-induced pricing changes.

Conclusion

The unfolding scenario of tariffs introduced by the US government poses both risks and opportunities for the Swedish economy. As growth forecasts are adjusted and industries evaluate the implications of these policies, stakeholders will continue to monitor the situation closely in the coming months.