By Bibiana Piene/NTB
– A trade conflict between the EU and the US constitutes one of the biggest risks for Norwegian companies, says NHO chief Ole Erik Almlid to NTB.
Donald Trump has announced that he will introduce a global tariff of between 10 and 20 percent if he wins the election in the United States. And a tariff of at least 60 percent on goods from China.
Will answer
The EU will probably respond to Trump’s tariff shock with corresponding tariffs on American goods. That is the general opinion in Brussels.
– It is difficult to imagine that there will be no countermeasures, says a diplomatic source to NTB.
From the Norwegian side, the fear is now that a European punitive tariff will also hit Norwegian goods, not least raw materials such as steel and aluminium. Because it is far from certain that Norway will get an exception – even though we have the EEA agreement and are part of the internal market.
The EU is by far the largest market for Norwegian goods. But as you know, Norway is not part of the EU’s customs union – and can thus be considered a third country.
– If the EU and the USA were to agree on new agreements that give EU companies special treatment, we are basically not covered, points out Almlid.
Analysis predicts a drop in exports
The Norwegian authorities have been working quietly for a long time to prepare for the situation.
Among other things, an external evaluation has been ordered of what will happen to production, exports and employment in Norway if Trump takes the tariff plans seriously.
The analysis, which NTB has been given access to, deals with ten different customs scenarios.
All scenarios will lead to a decline in Norwegian exports – albeit to varying degrees, the analysis states.
Worst of all, it will affect the fishing and petroleum sectors.
Trump’s tariff shock could also upset the entire global trade balance.
– We may see a domino effect, says a source.
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Fast-acting EU group
The machinery has also been set in motion in the EU following Trump’s constant tariff threats.
As NTB has previously mentioned, a separate fast-working working group has been set up to be prepared with countermeasures should Trump win the election.
The EU may choose to respond to the Trump tariff by simply imposing punitive tariffs against the US. But it is more likely that the tariff will be general, among other things to stem a flood of goods from China, which will look for new markets if the US closes the door.
For example, China, which is a large steel producer, could conceivably try to dump its steel in Europe.
This happened in both 2003 and 2018. Both times the EU introduced protective measures, read tariffs, to protect its own steel industry.
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Positioning itself
In Norway, too, steel makes up a significant proportion of exports. In 2018, after hectic diplomacy, Norway was granted an exemption from EU customs. In 2003, we didn’t.
– We are probably closer to the 2018 model today. But nobody knows, says a high-ranking source in Brussels.
In addition, there can be problems if an increased level of conflict requires rapid action. Then there may be little time to negotiate extraordinary adjustments for Norway.
Norway has already begun to position itself vis-Ã -vis the EU when it comes to obtaining exemptions. Among other things, the matter was raised at the last meeting of the EEA committee.
– It is very important that Norway is on the ball, says Norsk Industri’s man in Brussels Marius Vahl to NTB.
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“Cheating” the Americans
Both China and the EU currently have large trade surpluses with the US, which Trump believes is cheating the Americans.
By building high tariff walls, Trump also hopes to start domestic production and create more jobs.
But the customs walls could have a boomerang effect, analysts warn.
Imported goods will become more expensive for American consumers. In addition, American exports may suffer.
This happened, among other things, in 2018, when American soybean farmers were hit hard by the trade war between the United States and China.
The end of visas meant that Trump had to spend billions of tax dollars to compensate the farmers.
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