The current uncertainty surrounding U.S. tariff rates functions as an invisible trade barrier and may cost Danish firms access to the American market.

This is the topic of an op‑ed in Finans written by CEFAU Centre Director Professor Phillip Schröder and Senior Analyst Tine Jeppesen. They point out, among other things, that there is significant potential for increased trade – both within and beyond Europe – if policymakers work to dismantle barriers. They further argue in favour of export promotion initiatives such as export credit guarantees, which can support Danish exporters in a world where uncertainty has become the norm.

Read more here. 

The analysis shows:

• Sudden increases in inflation can cause an unnecessarily long-lasting decline in the real income of transfer recipients. This is due to the current indexation method. A weakened level of private consumption can contribute to lowering overall economic activity, and the current indexation method therefore affects the economy as a whole.
• We propose a new indexation method based on the price and wage assumptions (the PL index) that the Ministry of Finance already estimates each year when preparing the finance bill.
• By basing indexation on the PL index combined with a correction for previous forecast errors, it is possible to ensure that transfers will, over time, follow the same development as today. The proposed method does not change the size of payments, only the timing.
• Had the proposed indexation method been in place by 2020, transfer recipients would not have experienced such a sharp decline in real income during the inflation spike in 2022, and they would have returned to their previous income level significantly earlier than what actually happened.
• The proposed method can be implemented from 2027 without requiring phasing-in or transitional arrangements, and neither the state budget nor transfer recipients will notice any significant immediate difference. But the next time inflation jumps, the real income of transfer recipients will be better protected.

Read the proposal here

In a new CEFAU brief, we examine Danish SMEs' export exposure to the United States in the light of the new trade policy realities.

The analysis shows:

• In 2024, the United States was the fifth‑largest export market for Danish SMEs, and the number of SMEs exporting to the U.S. increased steadily from 2015 to 2024
• Compared to larger firms, Danish SMEs' exports from Denmark to the U.S. are particularly concentrated in sectors with a lower likelihood of tariff exemptions
• SMEs are more vulnerable to rising trade costs than larger firms. They typically have fewer options for bypassing tariff barriers, for example through local production, and they often operate in fewer export markets – making it more difficult to redirect exports elsewhere
• However, only a small share of Danish SMEs with direct exports to the U.S. export a large proportion of their total exports to the U.S
• Overall, the analysis indicates that SMEs are particularly exposed to the new U.S. trade policy direction, but the overall consequences for Danish exports will be limited. This is because SMEs account for a relatively small share of Denmark's total exports to the U.S., and because only a limited number of SMEs are strongly exposed to the American market
• One way to support individual SMEs exporting to the U.S is through export‑promotion initiatives – for example, advisory services on U.S. tariff and export regulations to reduce uncertainty, as well as assistance in identifying new markets.

Read more here

Read more here: Bliver 2026 en god sæson for europæisk industripolitik? - Finans

However, regardless of the problem one wishes to solve, there are better solutions than changing VAT. Altering VAT would be an unnecessarily expensive way to achieve the intended goals. And the unnecessary additional cost of solving these issues through VAT would have to be paid by citizens through higher taxes, reduced public services, or lower social benefits.

On Friday 17 October 2025, Politiken published an op-ed by, among others, Senior Analyst Marie Møller Kjeldsen and Centre Director Michael Svarer arguing for the preservation of a uniform VAT rate and proposing alternative (and more cost-effective) solutions to the challenges that differentiated VAT has been suggested to address.

The findings show that exporters typically reduce their exports to the affected countries - even when their products are not directly subject to the sanctions. The impact on a firm's economic performance largely depends on how exposed the firm is to the sanctioned markets. Therefore, it is important to have a clear picture of which firms and sectors are potentially affected - even when sanctions only target specific individuals, entities, or products.

Similarly, it may also be beneficial to enhance existing export-support initiatives, such as advisory services and guidance for companies, when implementing new sanctions to reduce indirect effects.

Today, we are publishing a CEFAU Research Brief based on Ina's and Saskia's articles. The Research Brief provides perspective and describes the findings from peer-reviewed research. Here are three key take-aways:

1. Sanctions also affect the exports of products that are not directly covered by the sanctions
2. Sanctions come in many different forms—from export bans to travel restrictions—and their effects vary across countries depending on the type and purpose of the sanctions
3. The impact of sanctions on the economic performance of exporters largely depends on how exposed they are to the sanctioned markets.

Today, we are publishing a CEFAU Research Brief based on Jackie's article which summarizes and contextualizes the findings. Key takeaways include:

• Corporate mergers increase volatility in the overall Danish economy
• Mergers may, however, make the involved firms more stable
• Firms that engage in mergers are significantly larger than other firms.

The brief explains how the results were derived and why they are relevant for policymakers and competition authorities.