Swedish Industries Grapple with Tariffs, Funding Shortages, and Major Defense Contracts in 2025

Swedish industrial companies are facing a complex landscape in 2025 marked by challenges from global tariffs, sanctions, and financial pressures on key projects. According to experts Mattias Hedwall and Olof König from Baker McKenzie, companies must rapidly adapt to rising costs and stricter regulatory demands, especially those stemming from shifting US-EU trade tariffs and new EU sanctions policies. This includes comprehensive supply chain reviews, adjustments in production locales, and close compliance adherence (source 100357).

Meanwhile, Stegra's ambitious green steel plant in Boden, designed to use renewable hydrogen instead of coal, is encountering a critical funding gap. Originally fully financed with 6.5 billion euros, the project now faces an urgent need for an additional 10 billion kronor due to rising construction and infrastructure costs, with insolvency risks if new credit is not secured soon. The plant aims to begin production by 2026/27 and reach full capacity in 2028. Major investors like Kallskär and Altor are expected to contribute more despite government funding denials (source 100479).

In a more positive development, Saab secured a 2.6 billion kronor order from the Swedish Defense Materiel Administration (FMV), extending a previous contract focused on future combat aircraft concept studies covering manned and unmanned solutions through 2027 (source 100492).

These diverse developments illustrate the dual pressures and opportunities facing Swedish industry in 2025 amid global economic shifts and evolving national security priorities.