Global Trade Stabilizing – But New Normal Poses Challenges for Swedish Exporters

Nine months into Trump’s presidency, global trade remains under pressure — but the worst fears from April have not materialized. The Swedish Export Credit Agency’s (EKN) Chief Economist Stefan Karlsson says a “new normal” has taken hold, marked by high US tariffs, tighter conditions, and a reshaped landscape for Swedish exporters.

“It’s still a tough environment, but the playing field has become a bit more stable now,” says Stefan Karlsson. “That applies not only in the relations to the US but also to other major economies.”

Despite this, very recent figures from the International Monetary Fund (IMF) offer a slightly more optimistic outlook.

Trump’s tariffs – not as bad as feared

Global growth for 2025 has been revised upwards by 0.2 percentage points compared to July, from 3.0 to 3.2 percent. For 2026, they expect 3.1 percent growth.

Trade volumes have also been adjusted positively by a full percentage point to 3.6 percent for 2025.

”When the tariff war began, many feared a far more severe impact on inflation and growth. Now, nine months into Trump’s presidency, the projections show that it hasn’t been as bad as initially feared,” Karlsson says.

However, uncertainties in the market

The new tariff regime — particularly between the US, Kina, and EU — has, however, created a transformed export environment. So far, the tariffs primarily affect goods trade, not services.

A new US–EU trade agreement reached in late July remains a potential source of uncertainty.

“General tariffs increased to 15 percent, but the deal still needs formal EU approval,” Karlsson notes. “And the European Parliament has indicated it’s not fully satisfied with the agreement.”

The stronger Swedish krona has become another challenge for exporters.

“Most exports are invoiced in euros and dollars, meaning companies now get fewer kronor for each sale,” Karlsson says. “It’s a double negative effect right now.”

Both the tariffs and the currency dynamics, Karlsson notes, stem from the same root cause: “They both reflect the current U.S. government’s policy direction.”

China’s edge – global risk

Another major geopolitical risk lies in the growing dependency on China’s processing technologies for critical raw materials.

“The metals themselves are spread across the globe, but China holds the technological key to refining them,” Karlsson says. “That’s China’s edge — and everything from our defense industry to other sectors depends heavily on it.”

The pandemic strengthened the push toward regional hubs and diversified supply chains, a trend Karlsson says has only deepened in the new situation.

“Companies realized the importance of resilience. Many now prefer to have two or more regional suppliers instead of one global,” he says.

Unchanged export levels – but new markets

Swedish goods exports to the U.S. dropped about 8 percent in the first half of 2025.

However, exports have grown to other markets, including the UK, the Middle East, and smaller regions.

From the EU’s side, new trade deals remain a priority, something that historically has benefited Swedish companies.

“The EU is negotiating with India and Australia and has reached an agreement with Indonesia. These help make new markets accessible — and Swedish exporters have historically been very good at using such agreements.”

Swedish export challenges arise

Looking ahead, Karlsson expects relative stability from a Swedish and European standpoint — assuming the US–EU deal gains final approval.

“The current situation could persist for some time,” he says. “The big wildcard remains the US–China relationship. The rest of the world would benefit greatly if tensions there were to ease.”

Swedish exports to Asia, however, remain a concern. 

“Exports to Asia are down 4 percent, which is worrying, since those are the fastest-growing markets. Swedish exporters need to be more successful there, but markets like China and Southeast Asia are producing goods that directly compete with ours. It’s not an easy market to break into”, Karlsson says.