The Nordic Countries and U.S. Relations

The Nordic Countries and U.S. Relations

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Updated April 4, 2024
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 prosperous market economies with
relatively high standards of living. With a collective
population of nearly 28 million people, the Nordic countries
have a combined gross domestic product (GDP) of roughly
$1.9 trillion (see Figure 1). 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
and innovation 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.
The Nordic countries were affected economically by the

COVID-19 pandemic and, since 2022, by Russia’s war
Source: Graphic by CRS, as of April 2024, based on Economist
against Ukraine. GDP contracted in all five Nordic
Intel igence Unit data.
countries in 2020 due to the pandemic, rebounded in 2021,
but slowed in 2022 and 2023 amid the conflict in Ukraine,
Foreign and Security Policies
elevated energy prices, high inflation, and rising interest
The Nordic countries generally share an international
rates. GDP growth is expected to remain modest in all five
outlook that prioritizes cooperation, both among themselves
Nordic countries in 2024 (between roughly 1% and 2%) as
and with the international community. The Nordics work
inflation eases and interest rates stabilize. Aging
together on regional issues in the interparliamentary Nordic
populations and other demographic and societal changes
Council and the intergovernmental Nordic Council of
raise questions about the long-term sustainability of the
Ministers. They promote Nordic defense cooperation
Nordics’ social welfare systems.
through NORDEFCO, a forum that brings Nordic military
officials together. Since the 1950s, the Nordic Passport
Migration policy is a key political issue in the Nordics. The
Control Agreement has allowed Nordic citizens to travel
2015-2016 spike in refugees and migrants in Denmark,
freely and reside in any Nordic country. The Nordics also
Finland, Norway, and Sweden—mostly from the Middle
are strong proponents of the United Nations and multilateral
East, Afghanistan, and Africa—strained education, housing,
solutions to global challenges. They are frequent
and welfare systems. Most Nordic governments introduced
contributors to international peacekeeping missions, major
tougher asylum policies and curtailed some welfare
providers of development and humanitarian assistance, and
benefits. The refugee and migrant waves also stirred
supporters of U.N. efforts to address climate change.
debates about identity, integration, and security (in relation
to both terrorism and crime). Refugees from Ukraine,
As seen in Figure 1, all five Nordic countries are NATO
however, generally have been welcomed by Nordic
members. Finland and Sweden were militarily nonaligned
governments and societies.
for decades, but Russia’s war against Ukraine upended
Finnish and Swedish security policies that had sought to
Over the past decade, concerns related to migration,
balance ties to the West and relations with Russia (Finland
globalization, and other political and economic challenges
has long been particularly mindful of its 830-mile land
have generated voter distrust of established center-right and
border with Russia). Both Finland and Sweden applied to
center-left political parties throughout the Nordics and
join NATO in May 2022. Finland acceded to NATO in
fueled the rise of populist parties. Most anti-establishment,
April 2023 and Sweden acceded in March 2024 (see
populist parties in the Nordics are on the right or far right
below). Finland, Sweden, and Denmark also belong to the
and hold nationalist and anti-immigrant views. In Sweden, a
European Union (EU). Finland is the only Nordic country
far-right party has provided parliamentary support for a
that uses the euro, the EU’s common currency. Although
center-right government since October 2022 (in exchange
not in the EU, Iceland and Norway participate in the EU’s
for tightening immigration, asylum, and criminal justice
single market and Schengen area of free movement.
policies). Following Finland’s April 2023 election, a far-
right party with nationalist, anti-immigrant views joined a
Nordic Security, Russia, and NATO
coalition government led by a center-right party.
Relations between the Nordic countries and Russia have
been strained for over a decade in light of Russia’s military
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link to page 2 The Nordic Countries and U.S. Relations
resurgence, increased Russian military activity near Nordic
Table 1. U.S.-Nordic Economic Relations
borders, and Russia’s 2014 aggression in Ukraine. Since
(direct investment [historical-cost basis] and employment)
Russia’s full-scale invasion of Ukraine in February 2022,
Nordic governments have backed increasingly punitive
Workers
Workers
sanctions against Russia, including targeting Russia’s
Employed
Employed
energy sector, and have provided military, financial, and/or
U.S.
Nordic
in U.S. by
in Nordics
humanitarian aid to Ukraine. Denmark, Finland, Norway,
Direct
Direct
Nordic-
by U.S.-
and Sweden also have been increasing defense spending
Inv. in
Inv. in
Owned
Owned
amid heightened security concerns about Russia and to
Nordic
Nordics
U.S.
Affiliates
Affiliates
meet NATO defense spending and capability goals.
Country
(2022)
(2022)
(2021)
(2021)
The Biden Administration and most allies assessed that
Denmark $14.0 bil
$39.4 bil
48,300
38,200
Finnish and Swedish NATO accession would enhance
Finland
$4.4 bil
$9.9 bil
34,200
21,800
alliance capabilities and strengthen NATO’s defense
posture, especially in the Baltic Sea region. All but two
Iceland
$91 mil
N/A
400
1,800
NATO allies completed national ratification procedures to
allow Finland and Sweden to accede to NATO within
Norway
$13.5 bil
$36.9 bil
7,200
37,400
months of their application in 2022, but consensus is
Sweden
$60.3 bil
$94.1 bil
208,700
62,900
required to admit new NATO members and Turkey
Source: U.S. Department of Commerce, Bureau of Economic
(Türkiye) and Hungary raised concerns and delayed the
Analysis, International Trade and Investment Country Facts.
accession process. Both Finland and Sweden worked to
address Turkey’s concerns about terrorism and other
U.S.-Nordic defense ties are strong. Since 1951, the United
security issues. Hungary’s concerns largely centered on
States has provided for Iceland’s defense. Pituffik (formerly
grievances over past EU and Swedish criticisms of
Thule) Space Base in Greenland is the U.S. military’s
Hungarian government policies perceived as eroding the
northernmost installation, providing missile warning and
rule of law. Turkey and Hungary ultimately approved
space surveillance. Norway stores pre-positioned U.S.
Finland’s accession to NATO in 2023 and Sweden’s in
military equipment and has hosted U.S. Marines for winter
early 2024. (Also see CRS Insight IN11949, NATO
warfare training; a 2021 defense cooperation agreement
Enlargement to Sweden and Finland.)
(DCA) seeks to facilitate further U.S. military training in
The Arctic
Norway and permits U.S. infrastructure investment at
certain Norwegian military facilities. In 2023, the United
The Arctic region (or High North) is a key focus of Nordic
States concluded similar bilateral DCAs with Denmark,
foreign policies. All of the Nordics are members of the
Finland, and Sweden that provide for rotational U.S. troop
eight-country Arctic Council (along with Russia, Canada,
deployments and equipment storage on their respective
and the United States) and have long supported peaceful
territories (a separate agreement covers the U.S. presence in
cooperation in the Arctic. Warming temperatures and
Greenland). Denmark, Norway, and Finland also are
melting ice are increasing access to Arctic sea routes and
acquiring the U.S.-built F-35 fighter jet.
natural resources, with environmental and geostrategic
implications. Like the United States, the Nordic countries
U.S.-Nordic relations experienced some tensions during the
are wary of enhanced Russian military and commercial
Trump Administration. Some Nordic officials expressed
activity in the Arctic, as well as of China’s interest in the
concern about President Trump’s views on NATO, trade,
region, including with respect to Greenland (a largely self-
Iran, climate change, and other issues. U.S.-Danish
governing part of the Kingdom of Denmark, with a
relations were strained in 2019 by President Trump’s
population of around 56,000).
expressed interest in purchasing Greenland due to its
strategic location and natural resources.
Russia’s war against Ukraine has affected the Arctic
Council’s functioning. The Nordics, the United States, and
The Biden Administration has sought to bolster relations
Canada paused participation in the council in March 2022
with the Nordic countries, especially in light of challenges
and announced they would resume work on projects not
posed by Russia in both Europe and the Arctic. The Biden
involving Russia in June 2022. Norway assumed the two-
Administration and majorities in the House and Senate
year rotating chair of the council from Russia in May 2023
supported NATO enlargement to Finland and Sweden. The
and has sought to advance cooperation at the working level,
Senate and President Biden completed the steps necessary
but questions persist about the council’s future.
for U.S. ratification of Finnish and Swedish accession to
NATO in August 2022. In July 2023, President Biden
Relations with the United States
attended the 3rd U.S.-Nordics Leaders’ Summit in Finland,
The United States and the Nordic countries largely enjoy
which focused on security, technology, and environmental
close relations. Almost 10 million Americans claim Nordic
cooperation. Among other issues discussed at the summit,
ancestry. The United States and the Nordics cooperate on
leaders pledged to support Ukraine for “as long as it takes.”
many global and regional issues, including supporting
Some Nordic officials, however, have expressed concern
Ukraine; combating hybrid threats; countering terrorism;
about the status of continued U.S. funding for Ukraine.
addressing climate challenges; and promoting sustainable
development, including in the Arctic. The United States
Kristin Archick, Specialist in European Affairs
also is an important trading partner for the Nordics, and
IF10740
investment ties are extensive (see Table 1).
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The Nordic Countries and U.S. Relations

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