SY’s Pentikäinen: Trump’s tariffs put nascent economic growth at risk

The CEO of Suomen Yrittäjät, the Finnish SME association, says import taxes have a lot of negative impacts.

US President Donald Trump’s announcement at the start of February about import tariffs were not a surprise, as Trump had talked about them during his election campaign.

On 1 Feb., Trump announced tariffs on imports from Mexico, Canada and China, of which some would enter into force immediately and some during the week. Tariffs on imports from Europe will be set in the near future.

Suomen Yrittäjät CEO Mikael Pentikäinen expressed his opinion on Trump’s trade policy in a recent blog post.

“In a mutually interdependent world, import taxes raise costs and slow down trade flows. It’s difficult to see anything good in import taxes,” Pentikäinen writes.

There is as yet no exact information about duties on imports from the EU, but they are predicted to be about ten per cent. Now, information is awaited on which products the tariffs will affect.

“That (ten per cent) would cut a percentage point off European growth, according to Goldman Sachs. That would be a big hit.”

Fear for Finland’s economic growth

If and when tariffs on EU imports enter into force, they could be a harsh blow to Finland’s economic growth. Pentikäinen says that all the emerging economic growth could vanish as the consequence of a trade war.

“The US is Finland’s most important export market and many other products that go to the US from elsewhere in Europe contain Finnish parts. Import taxes will hit directly and indirectly. In this economy – and in the midst of a rising wave of strikes – a trade war would be poison to us.”

Pentikäinen believes the markets can yet make an impact on tariffs.

“Trump could climb down if stock prices fall. Trump doesn’t want that, as he measures his success by the stock markets. That’s why we should perhaps hope that the market reaction is strong enough.”

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