Import duties on Icelandic products raised
The recent decision by the U.S. administration to impose a 15% tariff on Icelandic goods has raised concerns among Icelandic officials, who see the move as potentially harmful to their economy. Icelandic Foreign Minister Þorgerður Katrín Gunnarsdóttir has expressed disappointment and surprise at the tariff increase, which could impact the longstanding trade relationship between Iceland and the United States.
Gunnarsdóttir, who earlier this summer wrote a letter to the U.S. trade representative highlighting the strong and longstanding trade relationship between the two countries, believes that the economic indicators between Iceland and the United States do not align and needs further examination. She intends to discuss the decision about the tariff increase with U.S. representatives immediately.
The tariffs, part of a broader new tariff system implemented by the U.S. administration, aim to apply 15% levies on goods from several countries, including Iceland. The range of tariff increases varies by country, but for Iceland, it went up from 10% to 15%. This could increase costs for Icelandic exporters, reduce their competitive edge in the U.S., and potentially lead to reduced trade volumes.
In response, Icelandic officials are likely to criticize the tariffs as unfair and detrimental to their economy, especially given that Iceland imports more from the U.S. than it exports there. They may seek diplomatic engagement or appeals at international trade forums such as the World Trade Organization to contest these tariffs or request exemptions. Iceland might also consider retaliatory measures or seek new trade alliances to mitigate the economic impact.
The U.S. President Donald Trump has signed an executive order imposing new tariffs on imports from dozens of trade partners, not just Iceland. The new tariffs have created uncertainty among some of the country's closest allies, including Canada, where tariffs on goods will increase from 25 percent to 35 percent.
The action is intended to strengthen the position of American exporters and stimulate domestic production. However, the new tariffs have also raised concerns about potential inflation in the U.S. Gunnarsdóttir, who considers Iceland and the United States as close allies, does not consider tariffs to be beneficial for households or businesses in Iceland.
As the tariff increase takes effect in the coming week, the Icelandic government is likely to closely monitor its impact on the economy and trade relations with the U.S. A meeting has been requested by an unnamed minister in response to the announced increase, and Gunnarsdóttir plans to request talks with U.S. representatives immediately to discuss the matter further.
[1] The Reykjavik Grapevine - Icelandic Foreign Minister Finds U.S. Tariff Increase on Icelandic Goods Disappointing and Unexpected [2] Iceland Monitor - Icelandic Foreign Minister Criticizes U.S. Tariff Increase on Icelandic Goods [3] The Icelandic Review - Icelandic Government Responds to U.S. Tariff Increase on Icelandic Goods [4] The Washington Post - U.S. Imposes Tariffs on Icelandic Goods and Other Imports in Widening Trade War
- Icelandic Foreign Minister Þorgerður Katrín Gunnarsdóttir, in response to the U.S. administration's tariff increase on Icelandic goods, has expressed disappointment and presented criticism, acknowledging the potential negative impact on her country's economy as part of policy-and-legislation discussions.
- In light of the U.S. tariff increase on imports from several countries, including Iceland, politics surrounding trade relations and general news have become increasingly central to the foreign trade agenda for affected nations, such as Iceland, as they navigate complex legislation and diplomatic engagement to contest or request exemptions from these tariffs.
