Kristiina Helenius
C.E.O.Miltton USA
USA
In August, Washington celebrated an anniversary. The Inflation Reduction Act is now one year old.
Inflation Reduction Act is a silly and misleading name for the largest and most ambitious economic restructuring the United States has ever attempted, but the results are anything but silly. In twelve months, the economy had added 170,000 high-paying jobs and was expecting to gain 1.5 million more. In the second quarter of 2023, the U.S. economy grew by 2.4% and there are 1.6 jobs available for every unemployed worker.
For a long time, the European Union reprimanded the USA to get serious about climate change. Now that it has, Europe thinks America might just have gone a bit too far and, especially, too U.S.-centric.
To me, that is just quarrelling between an old married couple.
The transatlantic economy is the backbone of the global economy. At 7.1 trillion dollars, it makes up one third of the global GDP. No market is as intertwined and sophisticated as the transatlantic one.
With the Inflation Reduction Act, CHIPS Act, and Infrastructure Law, the United States is introducing 2,000 billion dollars in new federal spending over the next ten years. This is the cornerstone of President Biden’s economic thinking or “Bidenomics.” The strategic goal is to ensure America’s position as the leading power and innovator and keep China at bay. The spending is likely not going to stop even with a new occupant in the White House. There is no way, of course, to guarantee anything in the tumultus world of U.S. politics, but right now the smart money is betting that climate policy is here to stay.
The United States and Europe are entering a new trade era. For Nordic companies, this means a new operating environment.
As Finland and Sweden cut ties with Russia and decided to join NATO, they gained clarity about their direction and alliances. This is true of especially Finland. There is no more political second-guessing or sitting on the fence. The message is clear.
Thankfully, the United States needs and wants what Nordic businesses have to offer. The defense industry is a great example. The 613-billion-dollar behemoth consists increasingly of space technology, cyber-security, AI, 5g and 6g, and quantum computing.
Emerging technologies are now used in both, civil and military endeavors. That enables companies with top technology to reinvent themselves as defense providers and do additional business in the defense ecosystem.
President Biden is aggressively home-sourcing chip-making and turning vehicles electric: the goal is that electric vehicles make up two-thirds of U.S. auto sales by 2032.
The focus of transatlantic economy is now more existential than before. Issues like climate and tech will grow more intertwined with trade. Granted, high stakes could make trade disputes more difficult to resolve.
So far, we already know that the United States became Finland’s largest trading partner for the first time, last year. Massive investments are pouring into efforts to battle climate change. The U.S. and Europe are each other's primary source and destination for foreign direct investment.
Tightening relationships and inter-dependency, momentum, and disrupting markets are an unusually good place to be standing on.
Happy birthday, Inflation reduction act.