According to Swedbnak, a trade war between the U.S. and China would have a bad impact on Estonia with its small and open economy.
"Estonia as a country, which has a small internal market and depends on exports, has thus far benefited from free trade," Tõnu Mertsina, chief economist at Swedbank, said in a press release. "Estonia's manufacturing companies are directing approximately 70 percent of their revenue to foreign markets."
According to Mertsina, the export of goods and services account for 78 percent of Estonia's GDP, while imports make up 73 percent. "With these indicators, we are ranked 11th in the EU," he noted. "Once the world's trade war escalates, our openness will unfortunately no longer be a bonus."
There is a general consensus among economists that protectionism has a negative impact on economic growth and the increase in economic prosperity, while free trade and the state's lighter interference in economic matters have a positive impact on economic growth, he added.
Editor: Aili Vahtla