Trump's Tariff Threats Shake Swedish Economy and Markets, Raising Export Concerns

European and Swedish markets experienced notable turmoil following U.S. President Donald Trump's renewed tariff threats targeting countries including Sweden. By mid-morning on January 19, 2026, the Stockholm Stock Exchange's broad index had dropped approximately 2%, with major firms like Investor and Volvo suffering losses amid growing investor unease. While defense stocks such as Saab gained, reflecting geopolitical tensions, the overall market reaction signals long-term economic concerns, with economists cautioning against panic selling.

Volvo Cars, Sweden's second-largest company employing over 20,000 people domestically, expressed serious concern over potential tariffs. CEO Håkan Samuelsson described the tariff threats as "very negative" for Volvo's business, emphasizing that the United States is the company's second-largest market with virtually all vehicles sold there imported from Europe.

Sweden's export sector is already feeling strain. Export numbers to the U.S. have declined by 16% from April to November 2024 compared to the previous year, compounded by the strengthening Swedish krona against the dollar. Stefan Karlsson, chief economist at Exportkreditnämnden, acknowledged that while the impact has been less severe than feared, particularly for vehicle exports which face higher tariffs, the prospect of new tariffs known as "Grönlandstullarna" could worsen the situation considerably. The total export value to the U.S. was around 150 billion SEK for January to November 2025.

Jan-Olof Jacke, CEO of Svenskt Näringsliv, expressed grave worries about increased global uncertainty undermining economic growth, stressing the importance of a united EU stance. The EU's response remains under discussion, with potential retaliatory tariffs against the U.S. being actively considered. Journalist Alexander Norén highlighted the significant risk a trade war poses to Swedish consumers, potentially raising prices and destabilizing finances if tensions escalate.

Overall, the tariff threats have triggered market declines, disrupted key exporters, and heightened economic uncertainty for Sweden. Though some sectors like defense are benefiting, the export-dependent Swedish economy braces for potential escalations, with policymakers and industry voices calling for tempered responses and coordinated actions within the EU.