Searching for a bright spot in the escalating trade dispute emanating from the U.S., Norway’s prime minister said the world’s biggest economy just isn’t as important anymore.
“It’s important to remember that the U.S. isn’t the same driving force as it used to be,” Erna Solberg said in an interview in Oslo on Monday. “The world economy has more legs to stand on and there are far more economies that are growing.”
The prime minister was a special guest of the G-7 in Canada and had an upbeat take after the summit that ended in chaos and more tariff threats from U.S. President Donald Trump.
There to discuss her vision for the world’s oceans, she found some common ground, even with U.S. officials. And while Trump ultimately rejected a joint-communique, the fact that it was initially agreed on should be taken as a positive, she said.
“Underlying it all, I experienced the G-7 summit as a meeting where we moved forward on many important issues, including those I was present at,” Solberg said. “Even though Trump didn’t participate, the Americans were present and gave clear signals and messages about the need to put efforts into the oceans and other issues.”
Trump upended the summit by rejecting the communique in a couple of tweets after he had already left and suggested he would seek to impose tariffs on U.S. car imports.
Solberg offered some advice on how to handle the U.S. president to avoid any future post-summit surprises. “With Trump it’s possible one just has to be angry when one meets him so he understands, instead of being angry after and before the meeting.”
Norway, which heavily relies on oil and gas exports, has seen scant effect from the U.S. tariffs on steel and aluminum. But should the international trade dispute escalate, Solberg said it could spill more broadly into world’s financial markets, where Norway’s massive $1 trillion fund has placed its wealth, as well as stall a global recovery.
“We’re at a time when we need to create more jobs, to give people hope, so the answer is not less international trade but more,” Solberg said. “What I’m afraid of are the cross-effects that could happen if other countries take action.”
Western Europe’s largest exporter of oil and gas has amassed much of its wealth in what’s now the world’s largest sovereign wealth fund and plans to spend 225.5 billion kroner ($28 billion) of that wealth to plug a deficit in this year’s budget. Still, it’s scaling back the stimulus its giving the economy.
Should the recovery continue, the prime minister said it could soon be time to hit the breaks.
“The goal is that we don’t increase oil wealth spending in a period when the economy is improving,” Solberg said. “The impulse to the economy is most important to me. Should growth continue to exceed trend growth, then the impulse should be neutral or negative.”