When the incoming US president, Donald Trump, threatens to impose tariffs on Danish goods in the US, it could already have consequences for some Danish companies that want to sell their goods to the Americans. Because even though such tariffs may have long-term prospects, the threat could have an effect here and now in the form of uncertainty among American importers.
This is the assessment of Associate Professor Jens Ladefoged Mortensen from the Department of Political Science at the University of Copenhagen, who, among other things, conducts research into international trade.
- That uncertainty can spread to a certain reluctance. You might look at alternatives from other countries or simply have it woven into a contract that if the goods are subject to tariffs in the future, the contract will not apply, he says.
As an importer, the last thing you want to do is burn through goods that cannot be sold.
- It is not Denmark that pays the tariffs, it is the American importer and ultimately the American consumer. This makes the product more expensive, says Jens Ladefoged Mortensen.
Disagreement over Greenland could lead to punitive tariffs
Donald Trump said at a press conference on Tuesday that he is ready to impose tariffs on Danish goods if the US does not gain control of Greenland. Trump does not rule out the use of either economic or military force, it was said.
The statements came after Donald Trump's son, Donald Trump Junior, paid a short visit to Nuuk earlier Tuesday, where he landed in Nuuk in his father's private plane.
The threat of punitive tariffs is startling, partly because it comes from one of Denmark's closest allies and largest export markets.
According to Jens Ladefoged Mortensen, an American punitive tariff on Danish goods would, however, trigger a trade war with the EU. The EU's member states have entered into a musketeer agreement, which means that any punitive tariffs would apply to all countries in the EU. The EU Commission will have to respond with counter-tariffs if necessary.
Danish Business does not take grief in advance
The business organization Danish Business is following the situation closely, but does not want to take grief in advance, says Morten Langager, director of Danish Business.
- It is a bit too early to speculate on the basis of what has emerged at this time. But the fact is of course that Denmark and Danish companies live off free trade. And therefore it is of course also of great importance that there is the possibility of trading crosswise and across continents. Nobody wants a trade war, he says.
In 2023, total Danish exports to the US were worth 292 billion kroner, equivalent to 15 percent of total exports.
- The US market is of vital importance to Danish companies, says Morten Langager.
- Danish companies have also invested massively in the US, and thus there are actually a lot of companies that are within the tariff wall because they produce in the US, says Morten Langager.
- But let's just see if it comes to that. I'd like to see that before I believe it. It will also be a situation that will not only affect Denmark, but the entire EU, says Morten Langager.
Løkke urges restraint
Foreign Minister Lars Løkke Rasmussen (M) also urged restraint on Wednesday after Trump's statements.
- I try to deal with the realities. I think we are all doing ourselves a favor by slowing down a bit, he said in response to a question about whether Donald Trump can do what he wants.
During Trump's previous presidency, the United States raised tariffs on steel and aluminum. 25 percent on steel and 10 percent on aluminum from Europe, among other countries. The EU then responded with retaliatory tariffs on American products such as jeans, whiskey and motorcycles.
Trump will be inaugurated as US president on January 20.
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