Trade war escalation poses significant risk for Finnish economy

Abstract

Developments in international trade policy will strongly shape the economic environment in Finland in the forecast years 2025–2027. Given the twists and turns in the United States’ trade policy, there is great uncertainty about the trade tariff situation in the forecast period. The alternative scenario examines two alternative paths in trade policy and how they will affect Finland. These two scenarios indicate that a cessation of the trade war would cause Finland’s exports and economic growth to pick up. They also indicate that a significant escalation in the trade war would considerably weaken Finland’s exports and economic growth.