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Nokia will benefit greatly from Biden's business visit

04. 07. 2023 Tuesday / By: Robert Denes / Business / Exact time: BST / Print this page

F innish companies have historically had a good opportunity to benefit from Finland's ties to the Western world and especially the United States. NATO membership, fighter jet agreements, and the US's massive green transition and infrastructure investments create a platform that creates deals for Finnish companies.

According to Risto EJ Penttilä, Finland is entering the scope of "friendly trade". The Nokia analyst believes that big investment programs will begin to be implemented next year.

Sauli Niinistö will host Joe Biden's visit to Finland and the North American summit on Thursday, July 13 in Helsinki, which will be attended by Swedish Prime Minister Ulf Kristersson, Norwegian Prime Minister Jonas Gahr Støre, Danish Prime Minister Mette Frederiksen and Icelandic Prime Minister Katrín Jakobsdóttir in addition to Niinistö and Biden.

The topic is closer cooperation between the Nordic countries and the United States in matters of security, environmental protection and technology. Niinistö last met Biden last May during his working visit to the United States. The previous Prime Minister of Sweden, Magdalena Andersson, was also present.

US President Joe Biden will visit Finland on July 13, when the Nordic countries and the US will hold a summit in Helsinki. Republic President Sauli Niinistö announced the visit on Sunday. The topic of the discussions is closer cooperation between the Nordic countries and the United States in security, environmental protection and technology issues.

"I believe that the economy will be on the agenda. In Finland, they did not realize that the USA wanted to win the green transition. In this regard, the carrot is used heavily in the US, and only the stick is used in Europe," says Penttilä, referring to Europe's regulatory focus on getting rid of the old, while the US invests in the new.

Biden's investment program totals two trillion, or two thousand billion. It includes infrastructure investments with broadband investments and a green transition package.

According to Penttilä, the United States counts Finland among the countries with which it engages in "friendshoring". This is the third level in the ring, the innermost core of which is the return of industrial production to the United States (re-shoring). The second level is a local shop where production is done in countries like Canada and Mexico.

“From the perspective of the United States, the Nordic countries can be such reliable partners in the future. This gives us an opportunity. Of course, they don't offer direct stores, but companies have to find them themselves."

According to Penttilä's estimation, Finnish companies understand the growing importance of the United States, which is accentuated by China's separation from the Western world and especially from the United States.

According to Penttilä, it is clear that, for example, Nokia and Ericsson are grabbing network investments that they are not getting from Huawei for political reasons.

“Nokia benefits a lot from this new situation where Chinese technology is frowned upon in the West. "Nokia is a reliable partner of the countries of the free world," says Penttilä.

According to his estimates, China will indeed remain a trading partner of the Western world, but the separation means a decline in trade, especially in the high-tech sector, which is related to information security issues, for example.

Erkki Vesola, an analyst at Inderes Nokia, believes that Biden's investment program will be visible starting next year.

“There should be good demand in the networks. The investment feeding program supports the development of North America, and Nokia said so at its June event," says Vesola.

Despite the US investment program, Nokia's online business faces slower growth after years of double-digit growth.

According to Vesola, Westernization is felt more specifically at Nokia due to Chinese politics, while Huawei has dropped out of the game in the United States, and its European activities may be restricted even more in the future.

"Nokia noted that the geopolitical profits were split equally between Nokia and Ericsson," says Vesola.

Despite everything, Nokia's share fell below four euros. Vesola describes the price as "very cheap" when compared to the company's earnings.

"Overall, the growth prospects of Nokia's target market are very moderate," Vesola explains of the company's current assessment.

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