Economists on the tariff threat: Keep a cool head

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Economists on the tariff threat: Keep a cool head
Photo: Julia Demaree Nikhinson/AP/TT

Donald Trump's latest tariff threat against Sweden and several other countries, over their support for Denmark in the Greenland issue, will lead to a joint response from the EU, two economists believe.

Even though this is aimed at individual EU countries, it will lead to strong solidarity and will be handled at the EU level, says Per Altenberg, chief economist at the Swedish College of Commerce.

He adds that this is the first time Trump has imposed tariffs on individual EU countries.

"I think it's still important to keep a cool head, but what can be seen is that the US seems to be using the tariff threat again as a foreign policy weapon. These tariffs, just like the previous tariffs, are not compatible with World Trade Organization rules," says Altenberg.

Robert Bergqvist, senior economist at the bank SEB, also believes that the EU will side with Sweden and the other seven designated countries.

It would be a big surprise if the EU, as a joint force, did not come together and respond to this, he says.

We will see how the EU and the individual countries react to this.

Robert Bergqvist notes that Trump's new threat is a step towards an escalation of the situation.

We've moved away from the fact that it's about economics, now it's about where you draw land borders. I think that's a whole new dimension to this serious situation that we have.

Whether it will lead to a trade war is too early to say, he believes. There is still time for negotiation.

I hope that there is a willingness to negotiate from both the US and Europe to find a solution to this.

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By TT News AgencyEnglish edition by Sweden Herald, adapted for our readers

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