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Updated September 13, 2018
The Nordic Countries and U.S. Relations
Political and Economic Overview
Figure 1. The Nordic Countries: Key Facts
The five Nordic countries—Denmark, Finland, Iceland,
Norway, and Sweden—share deep historical, linguistic, and
cultural ties and many political and economic similarities.
They are all stable democracies with parliamentary systems
of government and are largely regarded as open, egalitarian
societies. They also are prosperous market economies with
relatively high standards of living.
With a total population of almost 27 million people (see
Figure 1), the Nordics collectively form the world’s 12th-
largest economy. They have extensive social welfare
systems and relatively high tax rates but are considered to
be innovative, business-friendly countries. The Nordics
generally rank high on global competitiveness indexes.
Foreign trade plays a key role in their economies. They also
enjoy substantial natural resources. Norway in particular
benefits from vast North Sea oil and natural gas deposits.
Despite many advantages, the Nordic countries face some
Source: Graphic by CRS, based on Economist Intelligence Unit data.
challenges. The Nordics struggled economically in the
wake of the 2008-2009 global recession and subsequent
Foreign and Security Policies
European financial and banking crisis. Economic growth
The five Nordic countries generally share a common
has rebounded recently in most Nordic countries (to 2%-3%
international outlook that prioritizes cooperation, both
in 2017), but unemployment is relatively high in some
among themselves and with the international community.
(about 6% in Sweden and 8% in Finland). Despite Iceland’s
The Nordics work together on regional issues in the
strong economy, many citizens still are burdened by debt
interparliamentary Nordic Council and the
from the 2008 collapse of the country’s three main banks.
intergovernmental Nordic Council of Ministers. They
Aging populations and fertility rates below replacement
promote Nordic defense cooperation through NORDEFCO,
rates also raise questions about the long-term sustainability
a forum that brings Nordic military officials together. Since
of the Nordics’ social welfare systems.
the 1950s, the Nordic Passport Convention has allowed
Nordic citizens to travel freely and reside in any Nordic
The recent flow of refugees and migrants into Europe has
country.
affected Denmark, Finland, Norway, and Sweden. The
spike in asylum-seekers in all four countries during the
The Nordics are strong proponents of the United Nations
height of the crisis in 2015 strained education, housing, and
and multilateral solutions to global challenges. They are
welfare systems. Most Nordic governments have introduced
frequent contributors to international peacekeeping
tighter asylum policies and curtailed some welfare benefits.
missions, major providers of development and humanitarian
Newly arrived refugees and migrants also have stirred
assistance, and supporters of U.N. efforts to address climate
concerns about identity, integration, and security among
change. The Arctic region (or High North) is a key focus of
some segments of the public in the Nordics.
Nordic foreign policies. All of the Nordics are members of
the eight-country Arctic Council (along with Russia,
Economic difficulties and immigration issues have helped
Canada, and the United States). Finland currently holds the
fuel the rise of anti-establishment, populist parties in the
two-year rotating chairmanship of the Arctic Council.
Nordic countries. Most are on the right or far right and hold
anti-immigrant views, although a left-leaning party has
Some foreign policy differences exist among the Nordic
emerged in Iceland. Populist parties have joined coalition
countries. As seen in Figure 1, Nordic membership in
governments in Norway and Finland in recent years. A
NATO and the European Union (EU) varies because of the
populist party is the second-largest party in Denmark’s
countries’ different histories, geographies, and foreign
parliament (where a minority government relies on it for
policy and economic preferences. Although Sweden and
political support); another gained more seats in 2018
Finland are close partners of NATO, they maintain a
elections in Sweden and remains the third-largest party in
nonaligned status. Finland is particularly mindful of its
parliament. Such parties have put pressure on establishment
relationship with Russia, with which it shares an 800-mile
parties, upended some traditional political alliances, and
land border. Finland is the only Nordic country that uses the
heightened tensions within coalition governments.
euro, the EU’s common currency. Iceland and Norway
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link to page 2 The Nordic Countries and U.S. Relations
remain outside the EU but participate in the EU’s single
countries. As evident in Table 1, U.S.-Nordic investment
market and the Schengen area of free movement.
ties are worth billions of dollars, and affiliates of Nordic
multinational enterprises collectively employ roughly
Nordic Security and Russia
279,400 workers in the United States.
Russia has reemerged as a key security concern for the
Nordics in light of the conflict in Ukraine and increased
Table 1. U.S.-Nordic Economic Relations
Russian military activity near Nordic borders. In response,
(direct investment [historical-cost basis] and employment)
the Nordic countries have sought to enhance defense
cooperation and work with NATO to strengthen deterrence.
Workers
Workers
In April 2015, the five Nordics unveiled a new agreement
U.S.
Nordic
Employed
Employed
to increase information-sharing and cyberdefense
Direct
Direct
in the U.S.
in Nordics
coordination, explore joint procurement projects, and
Inv. in
Inv. in
by Nordic
by U.S.
improve regional security. Norway and Denmark contribute
Nordic
Nordics
U.S.
Affiliates
Affiliates
to NATO’s Enhanced Forward Presence (EFP) to bolster
Country
(2017)
(2017)
(2015)
(2016)
allies particularly vulnerable to Russia; each provides 200
soldiers to EFP battalions in Lithuania or Estonia. Sweden
Denmark $13.9 bil
$18.0 bil
37,300
40,300
and Finland also have drawn closer to NATO; both have
Finland
$3.3 bil
$6.5 bil
23,700
20,400
concluded host nation support agreements to facilitate
potential NATO deployments on Swedish and Finnish
Iceland
N/A
N/A
800
1,000
territory for military assistance or training exercises.
Norway
$29.2 bil
$26.0 bil
7,000
42,000
Russia’s actions have increased speculation that Sweden
Sweden
$34.6 bil
$50.9 bil
210,600
71,700
and Finland may seek to join NATO. Although concerns
Source: U.S. Department of Commerce, Bureau of Economic
about Russia have generated a degree of greater public
Analysis, International Trade and Investment Country Facts.
support for NATO accession in both Sweden and Finland,
opposition in each country remains significant. Most
U.S.-Nordic defense ties also are considered strong. Since
analysts do not expect either country to join NATO in the
1951, the United States has provided for Iceland’s defense
near future. Nordic governments continue to back U.S. and
at the request of NATO. Norway stores U.S. military
EU sanctions on Russia in response to the crisis in Ukraine,
equipment as part of the Marine Corps’ Prepositioning
despite some economic costs (especially for Nordic dairy
Program and, since early 2017, has hosted about 300 U.S.
and fish exporters affected by Russia’s retaliatory
Marines for winter warfare training. The Danish territory of
sanctions). At the same time, many Nordic officials caution
Greenland hosts a U.S. early warning radar station. In 2016,
against isolating Russia completely.
the United States signed bilateral defense cooperation
Countering Terrorism
agreements with both Sweden and Finland aimed at
increasing information exchanges, joint training exercises,
Nordic governments have been alarmed by the Islamic State
and research and development collaboration. In 2018, the
terrorist group (also known as ISIS or ISIL) and its ability
United States signed a tripartite statement with Finland and
to recruit or inspire European citizens and residents. Several
Sweden to further boost defense cooperation among all
hundred Nordic citizens have fought and/or trained with the
three countries. U.S. defense industrial relations with the
Islamic State in Syria and Iraq. A Swedish citizen, who may
Nordics are significant as well. Perhaps most notably,
have fought in Syria, has been charged in the November
Norway and Denmark plan to acquire the U.S.-built F-35
2015 Paris attacks and the March 2016 Brussels bombings.
Joint Strike Fighter as their next-generation fighter aircraft.
In April 2017, a rejected Uzbek asylum-seeker—with
reported Islamic State sympathies—killed five people with
At the same time, some tensions exist between the Nordic
a truck in Stockholm. In August 2017, a Moroccan asylum-
countries and the United States. Like others in Europe,
seeker with terrorist motives killed two in Turku, Finland.
Nordic officials have questioned the extent of support in the
Trump Administration for NATO, the EU, and free trade.
All five Nordic countries support the U.S.-led coalition
Most Nordic leaders have expressed concern about U.S.
against the Islamic State with military and/or humanitarian
tariffs on steel and aluminum products and possible future
assistance. Norway, Finland, Sweden, and Denmark
auto tariffs. Nordic policymakers also largely oppose
provide military training for Iraqi forces. Between 2014 and
President Trump’s decisions to withdraw the United States
2016, Denmark contributed fighter aircraft to coalition
from the 2015 multilateral nuclear deal with Iran and the
operations against the Islamic State. Nordic governments
Paris climate agreement, as well as the U.S. decision to
also have sought to enhance antiterrorism laws, prohibit
recognize Jerusalem as the capital of Israel. Nevertheless,
travel for terrorism purposes, and counter radicalization.
Nordic leaders appear willing to work with the Trump
Relations with the United States
Administration on common interests and global challenges,
and experts largely expect that the Nordic countries will
The United States and the Nordic countries largely enjoy
seek to preserve good relations with the United States.
close relations. Roughly 11 million Americans claim
Nordic ancestry. The United States is known to appreciate
Nordic cooperation on a wide range of global and regional
Kristin Archick, Specialist in European Affairs
issues, from cybersecurity to the Arctic. The United States
IF10740
is an important non-European trading partner for the Nordic
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The Nordic Countries and U.S. Relations
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