Norwegian companies and the US

Many Norwegian companies that export to or manufacture in the US rely on components and production inputs from Canada, Mexico and China. They are already affected by new tariff regulations and are now contacting us for advice.

Our office in Canada has heard from Norwegian companies operating in the US market that they are now assessing how this will affect their business. The same applies to Norwegian companies planning investments and industrial projects in Canada for export to the US. At the same time, Norwegian companies that have quickly recognised the opportunities now emerging in Canada are contacting our office to explore them.

The United States' new policies and the punitive tariffs it has introduced have made 'Made in Canada' an important priority for both Canadian consumers and businesses. Canada is known for having fewer trade barriers with the United States than between its own provinces. This is now being debated, with growing recognition that change is needed to stimulate the domestic market.

There are several indications that Canada will seek to process raw materials to a higher level before export than it has previously, and that significant investment in industrialisation may be needed to achieve this. Canadian authorities have signalled that they want to explore new value chains and suppliers, particularly from Norway and Europe.

'This could open up new relationships and opportunities for Norwegian businesses and suppliers. The Canadian and Norwegian markets have much in common, which means Norwegian exporters usually establish themselves quickly here,' says Geir Haugum, head of our Canada office.

On 7 March, a postponement of the general punitive tariffs on goods covered by the 2020 USMCA trade agreement was announced. However, this does not apply to key goods such as petroleum products, metals, seafood and pharmaceuticals.

The seafood industry is reporting considerable uncertainty and concern about exports to the US. Companies with production facilities in Canada are already affected by the punitive tariffs. We are taking 23 companies to the seafood trade fair in Boston from 16 to 18 March, together with the Minister of Fisheries and Ocean Policy and Christian Chramer, CEO of the Norwegian Seafood Council. The industry urgently needs information about changes to the regulatory framework. 

But what is the situation for Norwegian companies operating in the US?

The Trump administration's energy policy favours increased oil and gas production, and incentive packages designed to accelerate the green energy transition, such as the IRA (Inflation Reduction Act), are likely to be scrapped. At the same time, major green initiatives driven by commercial viability are under way across US states. New York and California are continuing their state-level initiatives and funding them independently. Renewable energy development is also continuing in Texas, driven by growing energy demand and the increasing commercial viability of wind and solar power. 

The US capital markets generally offer ample access to capital, but recent developments have created considerable uncertainty. Norwegian companies seeking funding in the US are generally taking a wait-and-see approach for now.

For the technology sector, regulatory cuts will boost investor appetite, while technology hubs in places such as California have good access to capital.

In the defence sector, defence products may qualify for tariff exemptions on US national security grounds. Any such exemptions would be important for Norwegian defence companies. 

The combination of uncertainty surrounding future tariff barriers against Europe and the business environment in Norway is prompting more companies to consider moving their main operations and headquarters to the US. 

As we know, the greatest uncertainty facing Norwegian businesses is the possibility of US punitive tariffs on the EU. However, Norwegian exporters are primarily concerned about potential EU countermeasures that could leave Norway isolated as a third country. Full access to the EU market is crucial for Norwegian businesses. The situation continues to change rapidly. While few businesses have made major changes, many are preparing for a range of future scenarios.