There are no winners if a trade war breaks out between the EU and the US, and Denmark will not be left out either. This is shown by calculations made by the Confederation of Danish Industries. In a recent analysis, it is estimated that the Danish economy will be 47 billion DKK smaller in the worst case and that 16,000 jobs will disappear.
And even though the analysis looks five years ahead, the consequences of a tariff war will be fully felt in just a few years. This is the assessment of Allan Sørensen, chief economist at the Confederation of Danish Industries.
- The Americans have raised tariffs on European goods of up to 25 percent. It is something that can be introduced relatively quickly, and which will hit us really hard.
- Almost regardless of which scenario we look at, it will have a big price for Denmark and the Danish economy if there are tariffs on Danish goods that are going to enter the US, he says.
And according to the chief economist, it is not only companies with direct exports to the US that will be affected.
- Something will hit us directly in the form of lower demand for Danish goods. But we will also be affected indirectly by the fact that we, for example, supply components to the German car industry, which may also have more difficulty selling cars in the US.
- It helps to pull growth out of Europe, and this in turn can be reflected in, for example, lower consumption, says Allan Sørensen.
As mentioned, the lost turnover in the US will cost Danish jobs.
- Companies that are looking at lost sales in the US market must decide whether the decline is so large that they need to reduce their workforce.
- And even though there is still great uncertainty and there is also some scope for such savings, the effect of the tariff on that front can also be felt quite quickly, he says.
According to the analysis, our hope is that everyone loses in a tariff war - including the Americans.
- The tariff means higher inflation, fewer jobs and lower growth in the US, and therefore we can hope that some of it will be rolled back when reality sets in. Then we can perhaps mitigate some of the worst effects, says Allan Sørensen.
Another mitigating circumstance is that Danish companies with production in the US will not be affected by the tariff.
jel /ritzau/
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