Trade and Foreign Policy Scenarios for Autumn 2025

This report presents a framework for understanding the trade and foreign policy scenarios anticipated for the latter half of 2025, particularly in the context of the Trump administration's priorities. It outlines the significant uncertainties affecting macroeconomic growth and inflation, emphasizing the impact of trade policies and geopolitical risks. The report details three potential scenarios for US trade policies: a baseline scenario where tariffs settle at moderate levels, a negative scenario with high tariffs leading to a recession, and a positive scenario where tariffs contribute to stable revenue. Additionally, it discusses the evolving nature of US foreign policy, shaped by internal political dynamics and external pressures. The implications for Nordic countries are also examined, highlighting the varying risks and economic forecasts for Denmark, Sweden, Norway, and Finland in response to these trade policy scenarios. The report aims to provide insights into the complex interplay of trade and foreign policy amidst high uncertainty.