Swedish exports to the USA - which sectors are most affected by higher tariffs?
News, Staff memo The Swedish economy is closely linked to the United States, both directly and through global value chains, and Swedish exports to the United States have increased in recent years. The United States is Sweden's third largest destination for exports of goods and the largest for exports of services.
The industries that export the most to the United States, and where higher tariffs could have particularly negative effects, include motor vehicles, pharmaceuticals and machinery. However, these industries' direct exports to the United States amounted to only 0.7 per cent as a share of Swedish value added in 2019. The share has certainly increased since then, and there are also some exports via third countries. But a large part of these exports are services that are not subject to tariffs. Nevertheless, the impact could be significant for individual companies, not least for those with no established operations in the United States.
The trade tariffs recently introduced by the US government risk reducing Swedish exports to the United States and thereby Swedish GDP growth. But overall, the review in this Staff Memo suggests that the direct effects of the tariffs at their current level will be relatively limited on both Swedish exports to the United States and GDP growth. At the same time, the tariffs have created uncertainty about future trade policy and the conditions for economic development. This could lead to lower global demand. Such indirect effects are likely to be larger.
Authors: José Camacho, Caroline Flodberg, Mårten Löf and Bengt Petersson, working at the Monetary Policy Departments.
Staff memos
A Staff Memo provides members of the Riksbank’s staff with the opportunity to publish advanced analyses of relevant issues. It is a publication for civil servants that is free of policy conclusions and individual standpoints on current policy issues. Publication is approved by the appropriate Head of Department. The opinions expressed in Staff Memos are those of the authors and should not be regarded as the Riksbank’s standpoint.