Looking back – one year with Trump

One year into the Trump presidency, predictions from our pre-election analysis have now proven to be accurate. However, the scale of the measures introduced and the posed tariff-threats has been without precedent.

Felinda Livgård, Trade Policy Adviser

In President Trump’s efforts to rethink the foundations of trade policy, the American administration has driven a shift towards a trade environment marked by protectionism, volatility and unpredictability. Some developments were anticipated, such as the preference for tariffs as a policy tool, but the actions taken has been without precedent.

We have seen the introduction of unique, country-specific “Liberation Day” tariffs, along with a range of sector-specific “232” tariffs. The frequent and unpredictable changes have challenged even the most experienced customs experts. In addition to the costs that tariffs incur, they have also led to greater administrative burdens and increased supply chain complexity. 

Tariffs do not improve the trade balance, and in every scenario we have simulated, the United States is the country most negatively affected.

To support Swedish companies, the National Board of Trade Sweden has hosted a tariff call centre throughout the year. The centre provides guidance on the latest tariff related developments from the American authorities. Since its introduction in April 2025, we have received about 400 enquiries.

Swedish exports to the United States have declined by 16 per cent compared with the same period in 2024 (April to November). It is clear that the new tariffs have contributed to this drop. Looking at potential effects for the American economy, our analyses show that tariffs do not improve the trade balance, and in every scenario we have simulated, the United States is the country most negatively affected.

However, for the current administration, tariffs are not solely about trade. They are also used to achieve political aims and to gain geopolitical leverage. Something that has become even more evident regarding the latest tariff-developments related to the threats of placing tariffs on countries not willing to accept the US territorial claims of Greenland. 

The legality of using the International Emergency Economic Powers Act (IEEPA) to impose tariffs is currently being reviewed by the US Supreme Court. A decision that is expected with high anticipation. But even if the Court were to rule the use of IEEPA unlawful, the US administration has been clear that they intend to turn to other legal instruments to justify its tariffs.

The Turnberry deal can be described as a damage-control strategy.

Trading partners attempting to navigate the new US trade landscape have found themselves pressured into entering an entirely new form of “trade deals”. These unbalanced arrangements cannot be compared with formal free trade agreements, and their long-term implications remain uncertain – the non-binding effects of the deals being proven by the most recent threats. They also represent a significant shift away from the rules-based international trading system. 

For the EU, the Turnberry deal can be described as a damage-control strategy, which included setting a ceiling of a 15 percent tariff on most goods imported into the US. Following the recent tariff-threats towards multiple member states made in relation to the US ambition of territorial claims of Greenland the European Parliament are expected to put the implementation of the deal on pause as the EU are assessing their options on how to counter the US actions. 

The US has left over 60 international organisations this past year—the WTO is not one of them. Instead, the US has quietly paid its overdue membership fees and appointed a Deputy Director General. However, US priorities for the 14th WTO ministerial conference indicate that continued US support may require fundamental changes to the organisation—including abandoning the MFN principle. 

Strengthening cooperation with new trading partners will be essential.

The second year of President Trump’s term has already proven that it will present serious challenges. The EU will need to manage growing geopolitical and security pressures from a partner that has historically been its closest ally. Maintaining unity within the EU and strengthening cooperation with new trading partners will be essential to reducing the impact of US policy.

If the past year has shown us anything, it is that predicting the future has become increasingly difficult. What is increasingly clear is that the current development is no longer solely about trade. Trade measures are now being used as tools in a broader effort to break up and reshape global political and economic influence. As signalled by the President of the European Commission, Ursula Von der Leyen: It is about building a new international world order. 

Felinda Livgård
Trade Policy Adviser