According to the recent analysis of Statistics Norway (SSB), Donald Trump’s trade policy can lead to a decline in Norway’s economy. The booming situation may turn around if the trade war escalates.
The analysis showing the results up to 2021. It says that the Norwegian GDP can potentially decline as low as minus 0.8% in 2021, if conditions such as reduced global demand for Norwegian goods, fall in stock prices, and increase in producer prices occur. Through customs war and minor trade, Norway can be hit hard as a result of the United States international trade policy.
“In my opinion, this is a realistic analysis,” said Espen Sirnes, associate professor at the Business School in Tromsø.
“The first to notice such a situation here in Norway is the export industry, which will lose a lot of its market. This will probably lead to terminations, explains Sirnes, who also points out that the state budget will be affected.
“A trade war will reduce equity values around the world, including the equity value of the oil fund. This will have an impact on the state budget, and it may be cut in public spending, says Sirnes, who is still not worried about Statistics Norway’s forecasts.
“It’s not an exaggerated forecast, and if this is the worst thing that happens as a result of a trade war, we will probably survive in Norway,” says Sirnes.
What is Trump’s trade policy?
Donald Trump became the president of the USA in 2017 and since then, the trade policy has resulted in major upheavals in international trade.
Trump believes that the United States has unfair terms in international trade, and thinks that the terms will be improved through a trade war. Initially, the United States could get better trading terms through trade war, but the problem is that Donald Trump has been working hard on all of their international trading partners at the same time. So those who are worst will probably be the United States,” says Sirnes.