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Updated October 25, 2023
The Nordic Countries and U.S. Relations
Political and Economic Overview
to both terrorism and crime). Refugees from Ukraine,
The five Nordic countries—Denmark, Finland, Iceland,
however, generally have been welcomed by Nordic
Norway, and Sweden—share deep historical, linguistic, and
governments and societies.
cultural ties and many political and economic similarities.
They are all stable democracies with parliamentary systems
Over the past decade, concerns related to migration,
of government and prosperous market economies with
globalization, and other political and economic challenges
relatively high standards of living. With a collective
have generated voter distrust of established center-right and
population of over 27 million people, the Nordic countries
center-left political parties throughout the Nordics and
have a combined gross domestic product (GDP) of over
fueled the rise of populist parties. Most anti-establishment,
$1.9 trillion (see Figure 1). They have extensive social
populist parties in the Nordics are on the right or far right
welfare systems and relatively high tax rates but are
and hold nationalist and anti-immigrant views. In Sweden, a
considered to be innovative, business-friendly countries.
far-right party has provided parliamentary support for a
The Nordics generally rank high on global competitiveness
center-right government since October 2022 (in exchange
and innovation indexes. Foreign trade plays a key role in
for tightening immigration, asylum, and criminal justice
their economies. They also enjoy substantial natural
policies). Following Finland’s April 2023 election, a far-
resources. Norway in particular benefits from vast North
right party with nationalist, anti-immigrant views joined a
Sea oil and natural gas deposits.
coalition government led by a center-right party.
Figure 1. The Nordic Countries: Key Facts
Foreign and Security Policies
The Nordic countries generally share an international
outlook that prioritizes cooperation, both among themselves
and with the international community. The Nordics work
together on regional issues in the interparliamentary Nordic
Council and the intergovernmental Nordic Council of
Ministers. They promote Nordic defense cooperation
through NORDEFCO, a forum that brings Nordic military
officials together. Since the 1950s, the Nordic Passport
Control Agreement has allowed Nordic citizens to travel
freely and reside in any Nordic country. The Nordics also
are strong proponents of the United Nations and multilateral
solutions to global challenges. They are frequent
contributors to international peacekeeping missions, major
providers of development and humanitarian assistance, and
supporters of U.N. efforts to address climate change.
As shown in Figure 1, the five Nordic countries are either
NATO members or aspire to join NATO. Although
Source: Graphic by CRS, based on Economist Intelligence Unit data.
traditionally militarily nonaligned, Finland and Sweden
applied for NATO membership in May 2022 given growing
The Nordic countries have been affected economically by
the Coronavirus Disease 2019 (COVID-19) pandemic and
security concerns about Russia. Finland joined NATO in
Russia’s war against Ukraine. GDP contracted in all five
April 2023, but Sweden’s accession has faced delays (see
below). Nordic membership in the European Union (EU)
Nordic countries in 2020 due to the pandemic, rebounded in
2021, but slowed in 2022 and 2023 amid the conflict in
varies. Finland is the only Nordic country that uses the
euro, the EU’s common currency.
Ukraine, elevated energy prices, high inflation, and rising
Although not in the EU,
Iceland and Norway participate in the EU’s single market
interest rates. Aging populations and other demographic
and Schengen area of free movement.
and societal changes raise questions about the long-term
sustainability of the Nordics’ social welfare systems.
Nordic Security, Russia, and NATO
Migration policy is a key political issue in the Nordics. The
Since 2014, Russia’s aggression in Ukraine and increased
2015-2016 spike in refugees and migrants in Denmark,
military activity near Nordic borders have alarmed Nordic
Finland, Norway, and Sweden—mostly from the Middle
officials. Nordic countries responded by enhancing defense
East, Afghanistan, and Africa—strained education, housing,
cooperation and working with NATO to strengthen
and welfare systems. Most Nordic governments introduced
deterrence. Since Russia’s renewed invasion of Ukraine in
tougher asylum policies and curtailed some welfare
February 2022, all Nordic governments have provided
benefits. The refugee and migrant waves also stirred
military, financial, and/or humanitarian assistance to
debates about identity, integration, and security (in relation
Ukraine and have backed increasingly punitive sanctions
https://crsreports.congress.gov
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against Russia, including targeting Russia’s energy sector.
States is an important trading partner for the Nordics, and
Russia’s war against Ukraine also upended decades of
investment ties are extensive (see Table 1).
Finnish and Swedish security policy that sought to balance
ties to the West, including with NATO, and relations with
Table 1. U.S.-Nordic Economic Relations
Russia (Finland has long been particularly mindful of its
(direct investment [historical-cost basis] and employment)
830-mile land border with Russia). The United States and
Workers
Workers
nearly all allies assessed that Finnish and Swedish
Employed
Employed
accession would enhance NATO capabilities and strengthen
U.S.
Nordic
in U.S. by
in Nordics
NATO defense posture in the Baltic Sea region.
Direct
Direct
Nordic-
by U.S.-
Consensus is required to admit new NATO members and
Inv. in
Inv. in
Owned
Owned
Turkey (Türkiye) and Hungary have yet to give final
Nordic
Nordics
U.S.
Affiliates
Affiliates
approval to Sweden’s accession. Turkey’s concerns have
Country
(2022)
(2022)
(2021)
(2020)
centered on what it views as Sweden’s support for terrorist
groups, especially those linked to the Kurdistan Workers’
Denmark $14.0 bil
$39.4 bil
48,300
37,100
Party (PKK), and demonstrations by pro-Kurdish groups
Finland
$4.4 bil
$9.9 bil
34,200
21,200
and Quran-burning incidents in Sweden have exacerbated
tensions. Turkish officials also have linked progress on
Iceland
$91 mil
N/A
400
1,700
approving Sweden’s accession to a possible U.S. sale of F-
Norway
$13.5 bil
$36.9 bil
7,200
37,500
16 fighter jets to Turkey. Hungary’s delay in ratifying
Sweden’s accession may be tied to EU and Swedish
Sweden
$60.3 bil
$94.1 bil
208,700
61,800
criticisms of the Hungarian government’s respect for the
Source: U.S. Department of Commerce, Bureau of Economic
rule of law. In July 2023, following steps by Sweden to
Analysis, International Trade and Investment Country Facts.
address Turkish concerns, Turkey agreed to move forward
with ratifying Sweden’s accession; Hungary indicated it
U.S.-Nordic defense ties are strong. Since 1951, the United
would do likewise. In late October 2023, Turkey’s president
States has provided for Iceland’s defense. Pituffik (formerly
sent a bill to ratify Sweden’s accession to Turkey’s
Thule) Space Base in Greenland is the U.S. military’s
parliament, which has begun to consider the measure but
northernmost installation, providing missile warning and
has not set a specific timeframe. Hungary’s parliament has
space surveillance. Norway stores pre-positioned U.S.
not yet scheduled a vote to ratify Sweden’s accession, and
military equipment and has hosted U.S. Marines for winter
Hungarian officials reportedly are in “no rush.”
warfare training; a 2021 agreement seeks to facilitate
The Arctic
further U.S. military training in Norway and permits U.S.
infrastructure investment at certain Norwegian military
The Arctic region (or High North) is a key focus of Nordic
facilities. In 2022, the United States and Denmark began
foreign policies. All of the Nordics are members of the
negotiations that may provide for rotational deployments of
eight-country Arctic Council (along with Russia, Canada,
U.S. troops and storage of U.S. military equipment in
and the United States) and have long supported peaceful
Denmark (a separate agreement covers the U.S. presence in
cooperation in the Arctic. Warming temperatures and
Greenland). The United States also is negotiating new
melting ice are increasing access to Arctic sea routes and
bilateral defense cooperation agreements with Finland and
natural resources, with environmental and geostrategic
Sweden. Norway, Denmark, and Finland are acquiring the
implications. Like the United States, the Nordic countries
U.S.-built F-35 Joint Strike Fighter.
are wary of enhanced Russian military and commercial
activity in the Arctic, as well as of China’s interest in the
U.S.-Nordic relations experienced some tensions during the
region, including with respect to Greenland (a largely self-
Trump Administration. Some Nordic officials expressed
governing part of the Kingdom of Denmark, with a
concern about President Trump’s views and policies on
population of around 56,000). Russia’s war against Ukraine
NATO, trade, Iran, climate change, and other issues. U.S.-
has affected the functioning of the Arctic Council. The
Danish relations were strained in 2019 by President
Nordics, the United States, and Canada paused participation
Trump’s expressed interest in purchasing Greenland due to
in the council in March 2022; they announced they would
its strategic location and natural resources.
resume work on projects not involving Russia in June 2022.
Norway assumed the two-year rotating chair of the Arctic
The Biden Administration has sought to renew and
Council from Russia in May 2023 and has sought to
strengthen relations with the Nordic countries. In July 2023,
advance practical cooperation at the working level, but
President Biden attended the 3rd U.S.-Nordics Leaders’
questions persist about the council’s future.
Summit in Finland, which focused on security,
environment, and technology cooperation. The Biden
Relations with the United States
Administration and many Members of Congress support
The United States and the Nordic countries largely enjoy
NATO enlargement to Finland and Sweden. The Senate and
close relations. Almost 10 million Americans claim Nordic
President Biden completed the steps necessary for U.S.
ancestry. The United States and the Nordics cooperate on
ratification of Finnish and Swedish accession to NATO in
many global and regional issues. For example, Finland
August 2022. The Biden Administration continues to urge
hosts a multinational center for combating hybrid threats in
Turkey and Hungary to approve Sweden’s accession. Also
which the United States is a partner country. All five
see CRS Insight IN11949, NATO: Finland Joins as
Sweden’s Accession Faces Delay
Nordic countries supported the U.S.-led coalition against
.
the Islamic State terrorist group (ISIS/ISIL). The United
Kristin Archick, Specialist in European Affairs
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The Nordic Countries and U.S. Relations
IF10740
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