18-02-2025
What Norway is doing to prepare for the upcoming tariff war
As a small, open economy deeply integrated into global trade, Norway is vulnerable to escalating tariff tensions between the US and the EU.
Even if Norway secures a trade agreement (meaning tariff exemptions) with the EU, it cannot entirely shield itself from the broader economic ripple effects of a trade conflict between two of the world's largest economies.
With fears of a full-blown tariff war growing, Norwegian policymakers are preparing measures to protect jobs, businesses, and the country's economic stability.
Norway's diplomatic efforts and trade strategy
The Norwegian government is actively engaged in diplomatic efforts to safeguard its trade interests, State Secretary Maria Varteressian at the Norwegian Ministry of Foreign Affairs told The Local.
"The government keeps in close contact with the European Union, US authorities, and other partners on these matters. We have been prepared for the developments in US trade policy. It is too soon to tell how Norwegian businesses and exports can be impacted by the increased US tariffs," she said.
For Norway, a country where exports support over 600,000 jobs, the stakes are high.
"This translates into one in five jobs. An important part of the government's priorities is to assist and protect Norwegian companies and jobs and prevent our companies from being affected by a trade conflict," Varteressian explained.
With almost 70 percent of Norwegian exports going to the EU, the country's economy is also highly dependent on smooth trade flows with Europe.
"Europe is Norway's most important export market… This export is important throughout the country," she added.
Can the EEA Agreement shield Norway?
Norway's position within the European Economic Area (EEA) remains its most significant safeguard against trade disruptions.
Varteressian underscored the importance of this agreement in protecting Norwegian businesses.
"The EEA Agreement is the cornerstone of Norway's broad cooperation with the EU. The agreement has played a key role in the Norwegian economy, private sector, and society for over thirty years. It extends the EU Single Market to the EEA EFTA States, including Norway, which consists of 30 European countries and over 450 million inhabitants. We are in close contact with our EU partners to ensure that Norway, as an integrated part of the single market, will not be affected by any EU safeguard measures," she said.
However, while the EEA Agreement provides a degree of protection, it does not fully insulate Norway from the impact of a broader trade war.
If US tariffs lead to retaliatory measures from the EU, Norway could still experience economic consequences.
A "triple tariff threat" on the horizon
Despite assurances from the Ministry of Foreign Affairs, concerns are mounting about the potential consequences of a tariff war.
Finance Minister Jens Stoltenberg has recently warned that Norway could face a "triple whammy" scenario that would significantly strain the country's economy.
Speaking at the security conference in Munich in February, Stoltenberg highlighted the risk of Norway being caught between the US and the EU in a tariff battle.
"Norway could be hit by a triple squeeze. First, we could be hit by tariff walls in the US, which affect companies that sell goods from Norway to the US. Then, we could be hit if the EU implements countermeasures and [Norway] comes outside of them. Then we fall between two chairs," he told the press.
He also pointed to a third, broader threat, noting that "Norway could be affected by a comprehensive trade war that could affect growth in the world economy with rising prices and interest rates. This would also affect the Norwegian economy."
Potential impact on Norwegian consumers
Last week, Ola Honningdal Grytten, a professor at the Norwegian School of Economics (NHH), told The Local that while Norwegian exports to the US are relatively small, the broader effects of a trade war could be severe.
He explained that an escalation in tariffs could drive up inflation, which in turn could lead to higher interest rates, making borrowing more expensive and slowing economic growth.
"Of course, one might experience tariffs on exported products too and higher prices on imported goods," Grytten said, cautioning that Norway could face indirect consequences even if it is not directly targeted.
"But the main challenge will be inflation, and thereof high interest rates, less innovation, less structural changes, less productivity and economic growth, and less demand for Norwegian products in the world markets."
