Nordic Cooperation Strengthens Resilience Against Global Trade Tensions
The global economy is increasingly shaped by geopolitical tensions, rising protectionism and reduced reliance on imports. For the small, open Nordic economies, where international trade is essential, this creates new risks.
All Nordic countries rely heavily on imports from Europe, but their most critical vulnerabilities are linked to countries outside the continent, primarily China and the United States. This is highlighted in the study, The Value Chains of the Nordics – Tracking Resilience and Vulnerabilities, conducted by Statistics Denmark, other Nordic statistical offices and ETLA Economic Research, and funded by the Nordic Council of Ministers.
The shifting geopolitical landscape has made Nordic cooperation more important. The analysis provides a deeper understanding of value chains in the Nordic region and how closer collaboration can strengthen regional resilience.
Dependencies and vulnerabilities
Nearly half of Nordic goods imports consist of intermediate goods, such as raw materials and components used in the production of other goods. The share is highest in Finland (57%) and lowest in Denmark and Iceland (42%). The primary source of intermediate goods for all Nordic countries is other European countries, followed closely by intra-Nordic trade.
The study also shows that Norway and Denmark are the most vulnerable to trade disruptions, while Sweden and Iceland are better prepared to respond to such disruptions. Geographically, the most critical vulnerabilities differ. Most critical imports to Denmark and Sweden come from the United States, while Finland and Iceland depend on China for vulnerable goods. Norway’s vulnerabilities are spread across a wide range of regions globally.
Large companies with at least 250 employees account for most imports and exports in the Nordic region. In Finland and Sweden, their role is particularly prominent, while smaller companies carry more weight in Iceland and Norway.
Procurement of raw material crucial for the green and digital transition exhibits pronounced geographical concentration patterns and is largely dependent on partners outside Europe. Finland and Norway are the most dependent on these materials.
In the new geopolitical landscape, economic tools are increasingly being used to achieve foreign policy objectives, challenging the Nordic countries’ open economic model. Heavy dependence on a single supplier or country represents a clear risk and underlines the need for continuous monitoring of value chains.
A more integrated nordic market
The study highlights that the reliance on imports from outside the Nordic region is a shared challenge that can be mitigated through greater coordination. A more integrated Nordic market could act as a buffer against external disruptions and strengthen the region’s economic capacity.
Key findings of the study
- Most Nordic intermediate goods imports come from Europe or other Nordic countries.
- The products most vulnerable to disruption originate from outside Europe: Denmark and Sweden depend on the US, while Finland and Iceland depend on China.
- Norway and Denmark are the most vulnerable to trade disruptions; Sweden and Iceland are more resilient.
- Procurement of raw material crucial for the green and digital transition exhibits pronounced geographical concentration patterns and is largely dependent on partners outside Europe.
- The reliance on external, extra-Nordic import is a shared aspect that calls for a coordinated response.
- A more integrated Nordic market could act as a buffer against external shocks and leverage the collective economic strength of the region.
