Iceland’s Minister for Foreign Affairs has expressed serious concern over the United States’ decision to impose a 10% tariff on all imported goods from Iceland. Although Iceland is not facing the steep retaliatory tariffs levied on other allies, Foreign Minister Þorgerður Katrín Gunnarsdóttir emphasised the broader implications for the country’s economy and international trade.
Close Allies Face Strained Trade Relations
In an interview with Mbl.is published yesterday, Þorgerður responded to the announcement from U.S. President Donald Trump regarding the new tariffs. She began by underlining the traditionally close relationship between Iceland and the United States.
“It is a major disappointment to see these good allies of ours raise tariffs on imports from our companies in the U.S. market—especially when we consider that our own market is wide open to American imports,” Þorgerður stated. “Trade between the two countries is balanced, but having said that, I want to emphasise that we intend to take our time, review the situation, and analyse our position.”
As Mbl.is reports, while the United States introduced a minimum 10% tariff on all imported goods, many countries were subject to even higher retaliatory tariffs. Iceland was not among those hardest hit.
Government to Meet With Industry Leaders
Þorgerður stated that the Icelandic government would meet with domestic industry representatives today to assess the situation. She also confirmed that the acting U.S. ambassador to Iceland would be summoned for a discussion.
“Of course, compared to other nations—Norway is facing a 15% tariff, the EU 20%, Switzerland 31%, and Liechtenstein 37%—we might say we’re ‘getting off easy.’ But looking at the bigger picture—for those of us who support free and open markets and want an economy that works for both large and small countries—this is still a disappointment to see the United States take this path. But as I said, we intend to examine this thoroughly,” Þorgerður stated.
She added that Iceland’s relatively lower tariff rate was no comfort.
“I do not feel any better about Iceland receiving lower tariffs while other nations are in deep trouble.”
The Importance of a Predictable Global Trade System
Þorgerður stressed that the prosperity of Western democracies has long relied on international trade and predictable market conditions. “This is a challenge for us, the fact that tariffs are being used again. He was serious, and he is following through,” she stated, referring to President Trump.
Although she declined to say whether the decision had exceeded her expectations, Þorgerður underscored the importance of maintaining strong diplomatic relations with the United States—citing shared ties in defence, culture, and economic cooperation.
Broader Economic Stakes for Iceland
According to Mbl.is, the European Union has stated that it is prepared to impose retaliatory tariffs against the U.S., although it would prefer a negotiated solution.
When asked whether Iceland—despite not being a member of the EU—would consider participating in similar countermeasures, Þorgerður responded cautiously.
“I intend to examine and analyse this carefully. What we Icelanders need to do—just as the Norwegians have also pointed out—is to ensure we don’t get caught in a triple whammy: [a downturn in the economy], tariffs from the United States and tariffs from the European Union,” she stated.
“That’s what we’ve been working on in recent weeks—both myself and the Prime Minister.”
She concluded by reiterating that any potential actions would be considered carefully, given the economic risks involved.
“Whether we intend to take any specific action—I’ll allow myself the time to analyse that. We need to approach this thoughtfully because a great deal is at stake for the Icelandic economy, for households, and for the broader global picture.”
