Trust is completely collapsing between Europe and the United States, says Etlan Kangasharju about Trump’s threat

No good news for Finland, which is experiencing weak economic growth, and for its exports.

This is what the head of the Confederation of Business (EK) says Timo Vuori President of the United States Donald Trump’s about Saturday’s customs threat.

Trump announced to impose ten percent customs duties on eight European countries, including Finland, from the first day of February. From the first day of June, the duties would rise to 25 percent. The tariffs would remain in place until the United States took control of Greenland.

“Companies say that the biggest poison for them is always the fact that you don’t know what rules will be used to trade tomorrow. It makes business planning difficult,” says Vuori.

Trump has previously issued various customs threats against different countries, so the situation did not come as a surprise, says the head of the trade policy unit of the Ministry of Foreign Affairs Ilkka Saarinen.

The bilateral agreement signed by the EU and the United States in August now sets the upper limit of customs fees at 15 percent. The agreement has brought stability to trade relations, Saarinen describes. If the increases announced now were to take effect, they would violate the agreement.

“Of course, the question would arise as to what will replace it.”

If implemented, the increased customs duties would affect the export opportunities of Finnish companies even more drastically than the current agreement, which Saarinen describes as unfavorable for the entire Union.

If tariffs were to come, Finland would not create in the midst of them alone, but negotiations with the US authorities would be held by the European Commission, says Saarinen.

Finns the companies have been able to adapt to the 15 percent tariffs, says Vuori.

“A 25 percent tariff would be such a burden that it would really hinder exports and slow down export growth and thereby our economic growth.”

The purchase and investment decisions of American customers may be postponed when the price of Finnish products threatens to rise.

Vuori reminds that the United States is also an important market for, for example, German industry, which is also affected by tariffs.

“Germany is important in Europe, and for Finland. The negative effects also come indirectly to Finland.”

Vuori does not speculate whether the tariffs may have an impact on, for example, the number of jobs.

“The United States is our most important export market when we put goods and services together. Services are not affected by tariffs, but goods are,” says Vuori.

The United States’ share of Finland’s goods exports has been more than 10 percent.

Thewhether Trump’s threat will come true, according to experts, it is still impossible to say.

“This is an unfortunate situation in the sense that trade and foreign and security policy are combined here in a rather worrying way,” says Saarinen of the Ministry of Foreign Affairs.

EK’s Vuori also states that it is not certain whether the tariff increases will come into force.

“You have to follow Trump’s playbook. We have seen here over the years that threats are made and threats are withdrawn.”

However, you can’t be lulled into it, Vuori says.

CEO of the Institute for Economic Research (Etla). Aki Kangasharju says that Trump’s announcement is above all a blow to relations. He says that 10 percent is still not much in a technical sense.

“Trust is now completely collapsing between Europe and the United States. I think that’s a much bigger problem here than 10 percent.”