The trade war between the US and Canada could have far-reaching effects on world markets, with repercussions for a wide region. President Donald Trump's decision to impose tariffs on products from Canada will shake up North American markets in particular. The US imposition of a 25% tariff on Canadian products, and a 10% tariff on energy, have caused tensions on both sides of the border.
Many experts believe that these measures could lead to a restructuring of production and a shift of market volumes to new destinations. However, the trade war between the US and Canada is not only affecting the North American market, its effects are also being felt in Europe.
Finland, as one of the world's major players in the forest sector, is not immune to these international changes. OP analyst Henri Parkkinen has warned that the new tariffs could bring challenges for Finnish forestry companies. The softwood pulp market in particular could come under new pressures as Canadian companies look for new export opportunities.
It is important for the Finnish forest industry that the market situation remains stable and predictable. However, tariffs imposed by the US and Canada may force North American operators to restructure their production chains, which could also affect market access for Finnish companies.
If demand for Canadian pulp in North America declines as a result of the tariffs, Canadian companies may look for new export markets. This will lead to a situation where Finnish and Canadian companies will compete for the same market opportunities, potentially tightening the market situation.
Trade is a dynamic environment where changes in one market can cause ripples around the world. A trade war between Canada and the US may force Canadian companies to look to Europe or Asia, particularly the Chinese market. In China, demand for fibre-based products has been high, and Finnish forest industry companies have traditionally been strong in this region. Almost half of Finland's pulp exports go to China, making this market a vital customer for Finnish companies.
Trade relations between China and the US are also under strain, and high tariffs may have affected China's willingness to increase imports from the US. This may open doors for other international players, but at the same time it will increase competition. Finnish companies may face increased price competition in the Chinese import market as Canada seeks to compensate for lost market share in the US. This situation, in which the market is seeking a new equilibrium, could lead to a more complex competitive situation for Finnish companies.
Changes in international trade and protectionist measures may set in motion a chain of events leading to new strategic openings and market investments. Finland is now looking carefully at how to maintain and strengthen its competitive position in these circumstances, while the market situation is changing and evolving. Thoughtful and strategic planning of movements is essential for Finnish companies to successfully navigate these changes and maintain a strong position in the global arena.
