Trade Minister on Trump's tariffs: "Extensive work is underway"
Wayne Seretis
Updated 17.17 | Published 17.09
Sweden could soon be drawn into Trump's trade war.
Trade Minister Benjamin Dousa says that intensive work is underway in the government.
And opens up for an unexpected turn: cheaper coffee.
- We must act in parallel and open up completely new markets for Swedish companies, he says.
Yesterday, President Donald Trump made good on his threats to introduce tariff walls against Mexico, Canada and China.
Soon, Sweden and the EU could also be drawn into the trade war.
Trump has promised tariff walls against the EU.
- The European Union has treated us very badly, Trump tells Reuters.
This makes Sweden's Minister of Foreign Trade Benjamin Dousa react.
- We generally think that it is very unfortunate that tariffs are being introduced. Sweden is the world's most free-trade-friendly country, we want fewer tariffs, not more, says Benjamin Dousa, Sweden's Minister of Foreign Trade, to Aftonbladet.
Dousa says that intensive work has been going on behind the scenes for a long time.
- There is a large and extensive preparatory work both in the EU and Sweden if the US were to introduce tariffs against the EU, he says.
What do the plans look like?
- We have looked at different scenarios, how it could affect Swedish companies and jobs. There is both a broad and in-depth preparation for what could come, and what happens in a longer scenario. Exactly how it will turn out we will have to wait and see, we do not yet know if there will be any tariffs.
Will the EU introduce its own tariffs in response ?
- It is too early to say anything concrete right now. It all depends on how the coming months will develop. We are in dialogue and hope that these tariffs will never be introduced.
The Minister of Foreign Trade wants to urge Swedes to remain calm after last night's announcement of a trade war between the US and Mexico, China and Canada.
- I don't think you need to go around worrying about your job. According to the Swedish Board of Trade's calculations, it would be about 0.02-0.05 percent of our GDP if tariffs were introduced against the EU, he says and adds:
- However, there are certain industries that could be affected more than others, especially the engineering industry, the automotive industry, medicine, and others.
What is the worst-case scenario?
- What could have significantly greater consequences is if it triggers major conflicts, if different blocs and countries start raising tariffs against each other, then the effect could be much worse.
Way is it important to have ice in your stomach?
– We don't know exactly what US trade policy will look like. During Trump's last term, trade between Sweden and the US increased by almost 40 percent despite threats of tariffs.
"Can't just sit still and point fingers"
Europe's economy has been struggling for a long time, and work to increase Europe's trade began before Donald Trump was elected president.
The irony of fate is that it could partly be the saving grace if Trump puts up tariff walls against the EU.
– We don't have a free trade agreement with the
region, where Brazil is the really big market. There is a proposal on the table that we hope to push through by the end of the year, which will remove 90 percent of all tariff barriers, says Dousa.
What dose that mean?
– This means that Swedish goods will find new markets, but it could also lead to lower prices for consumers for coffee, for example.
The work of signing new free trade agreements is a way to meet Trump's threats that both spread Europe's risks, as well as increasing our total trade.
- We must act in parallel and open up completely new markets for Swedish companies, so that they can continue to sell their products and services.
What is the highest priority right now?
- Two things are important for us trade ministers. One is to sign large agreements with, among other things, South America. Sweden is also at the forefront of signing free trade agreements with countries such as Indonesia. The really big thing would be a free trade agreement with India, a gigantic market.
Donald Trump
5 points about: Trump's tariffs and the trade war
Wayne Seretis
Updated 17.33 | Published 17.10
Trump has imposed punitive tariffs on Mexico, Canada and China.
The EU could be next in line.
Here is the background to the trade war – and what it means for Sweden.
1. Election promises about jobs, migration and smuggling
Some of President Donald Trump's most important election promises were that he would get rid of illegal migration, drug smuggling and move jobs back to the US. The punitive tariffs are a weapon that will make Mexico and Canada close their extensive borders.
Trump
also complains that the US has a trade deficit, meaning that it buys
more products than it sells to and from abroad. The tariffs are intended
to protect American jobs.
Many Chinese companies have moved their production to Mexico to get around the import duties that China already pays.
2. The start of the trade war
On
Saturday, February 1, Donald Trump signed the presidential order that
starts the trade war. For Mexico, a 25 percent tax will be imposed on
all products. For Canada, 25 percent applies to everything except
energy, where ten percent applies because many companies in the northern
United States depend on Canadian energy. China received an additional
ten percent tariff on top of previous import duties.
3. The counterattack from Mexico, Canada and China
Both
Canada, Mexico and China responded immediately with threats of tariff
walls against the United States, which means that the trade war is a
fact. Canada is imposing a 25 percent punitive tax, while Mexico is
talking about tariffs of 5-20 percent on American goods. China has not
specified its countermeasures.
4. The EU is next in line
Trump
has said on several occasions that he also wants to impose tariffs on
the EU, which sells more to the United States than we buy from there.
Sweden sells almost 190 billion to the US, but only buys 70 billion
kronor. Trump has not set a date, but a spokesperson from the European
Commission said on Sunday that the EU will “strike back forcefully” if
he imposes tariffs on the EU.
5. How Sweden will be affected by the tariffs
The
Swedish Chamber of Commerce has calculated that Swedish exports to the
US would decrease by around 16 percent if Trump imposes tariffs of
between 10 and 20 percent, as he has previously threatened. Sweden’s GDP
will be marginally affected, but certain industries will be
particularly affected, such as the engineering and automotive industries
and pharmaceutical companies.
If the trade war escalates and
becomes prolonged, Sweden’s and the world’s growth risks coming to a
standstill, and the economic recovery will be slowed down.
Sources: Swedish Chamber of Commerce, BBC, Reuters, CNN
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