"Taking a step back, one could say that in some ways the goal pursued by U.S. President Donald Trump is understandable — namely, to reduce the U.S. trade deficit and encourage more foreign investment into the country. But the method of achieving that through tariffs is, to put it mildly, baffling," said Uku Varblane, head of research at the Foresight Center.

"It doesn't seem very realistic that industries like clothing or textiles, or other light manufacturing sectors that have moved to Asia and lower-wage countries through international division of labor, would be revived in the U.S. The idea that international trade is not a zero-sum game and that all parties actually benefit from it just doesn't seem logical or comprehensible to Trump," Varblane said.

Varblane noted that when considering the impact of tariffs on Estonia, it's important to recognize that Estonia's direct exports to the U.S. are not very large, although there are some areas — like electronics or the manufacture of machinery and equipment — where such exports do exist.

"What's more important, however, is that Estonia has what could be called indirect exports to the U.S. through our main trading partners. For example, we sell certain products to Germany, and Germany then uses those Estonian products as components in finished goods that are ultimately sold to the United States. That indirect impact is far more significant for Estonia," Varblane explained.

Pension funds in the red

According to Varblane, there are other types of impacts as well — for example, some investments might end up bypassing Estonia because foreign investors could view it as less risky to invest directly in the U.S. in order to avoid tariffs.

Tariffs also affect Estonia through the stock markets. "For instance, Estonian pension funds that are heavily invested in U.S. markets have taken a clear hit, both because of their exposure and because markets inevitably react negatively to this kind of news," Varblane said.

Speaking about the stock market, Varblane noted that volatility has been high since the beginning of the year due to a flood of mixed signals.

"It's unclear what kind of policy the U.S. will pursue going forward — one day they talk about tariffs, the next day they talk about postponing or canceling them. There's a great deal of uncertainty," said Varblane.

He was confident that this would trigger a temporary or initial ripple effect — that is, indices would drop — but he also expected some stabilization in the near term.

In the longer term, however, predicting the outcome of Trump's tariff policy is more difficult, he said.

"It's likely that other countries will respond in kind. Even though the United States warned others not to retaliate, it seems unlikely that this will be the case. We're already hearing that many countries are considering counter-tariffs. In the end, this leads to a trade war and everyone loses," Varblane said.

At the same time, Varblane expressed surprise that the American president seems to have forgotten his own previous experience in office.

"Imposing unexpected and fairly steep tariffs isn't new territory for him. During his previous term, he did the same in his dealings with China, and in some ways, those situations also ended with the U.S. losing out. But somehow, it seems Trump has forgotten those past lessons," Varblane said.

Indirect effects outweigh direct ones

Peter Priisalm, head of investments at Avaron, said that Trump's move has created significant uncertainty about future prospects and that the overall economic impact of the tariffs is difficult to quantify.

"There could be unforeseen consequences," Priisalm said. "Many companies will have to change their business models or target markets. A number of firms will take a serious hit."

Like Varblane, Priisalm emphasized that in Estonia's case, the most significant effects on the economy are indirect.

"If we look at Estonia's trade with the U.S., it's relatively limited, and so the direct impact may not be that big. But 70 to 80 percent of Estonia's exports go to the European Union and Estonia exports a lot to countries that, in turn, export to the U.S. That's where the impact comes from — and it's hard to quantify at this point," Priisalm explained.

As an example, Priisalm pointed to a company like Norma, which manufactures components for the automotive industry. He said the company could be affected if carmakers lose their U.S. market due to tariffs and are left with nowhere else to sell those U.S.-targeted vehicles. "Although there could eventually be a rise in local sales of European cars, the entire process comes with added costs," Priisalm noted.

"In the coming days, we'll see a number of companies come out and say they can no longer operate in the U.S. That will naturally impact the share prices of those companies as well," Priisalm said.

"Markets trade based on future expectations and those share prices are no longer justified," he added.

Peeter Koppel, head of investments at Redgate Wealth, told Äripäev Radio that Trump has taken a step toward rolling back globalization.

"Before the tariffs were officially announced, there was talk of different scenarios — who would be affected, how much and why — but as the market reaction on Thursday morning showed, today's approach was far worse than even the more extreme scenarios that had been floated. We're now back to 19th-century trade policy," Koppel told Äripäev.

Company: Our growth will be capped

Janek Barndõk, sales director at Capra, a company that manufactures wooden saunas, said that Trump's tariffs don't have a major direct impact on them — at least not for now — because their U.S.-related business is still relatively small. However, he noted that they are currently in the final stages of several negotiations and the tariff decision could definitely influence how those deals play out.

Barndõk said that if those deals fall through, the company may need to rethink its supply chain. "We might have to consider making changes so that operations can still continue in the U.S. There are still some possibilities to make that happen," he said.

He added that, indirectly, there could be a positive aspect: the tariff applies globally and many of Capra's competitors producing similar products are based in the European Union or China. "And China ultimately got hit with even higher tariffs," Barndõk noted.

"We'll see how things go. Honestly, right now it's hard to say anything with certainty," he said regarding the company's future prospects.

"In the end, these tariffs could really slow us down, because customers might turn to other markets where the products are simply cheaper. The tariff makes our product significantly more expensive," he said.

According to Statistics Estonia, the total value of goods exported from Estonia to the United States last year was €714 million, making the U.S. Estonia's sixth-largest trading partner.

Compared with the previous year, exports from Estonia to the United States grew by 42.9 percent. In 2023, export value stood at €499 million; in 2024, it rose to €714 million. Recently, the main drivers of this export growth have been communication and telecommunication equipment, accounting for 26.9 percent of all Estonian exports to the U.S., followed by refined petroleum products, which made up 8.45 percent.

In recent years, nearly 1,000 Estonian companies have exported goods and services to the United States. The largest exporters among them include Veriff OÜ, NPM Silmet OÜ, Clevum OÜ, Magnetic MRO AS, SaleMove OÜ, Arte Bunkering OÜ, AS Norma and others.

In 2024, the value of goods imported from the United States to Estonia totaled €315 million, making the U.S. Estonia's 15th-largest trading partner.

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