The 2025 US tariffs’ impact on internationalisation: How the shock affects firm commitment in Swedish SMEs

Sammanfattning

In 2025, the United States introduced an extensive set of tariffs that affected trading partners globally. This thesis examines how these tariffs affected the behavioural and attitudinal commitment of Swedish small- and medium-sized enterprises (SMEs) that are active in the US market. With a theoretical focus on the Uppsala model, and extending it with additional dimensions of attitudinal commitment, this study considers the tariffs as an exogenous shock and aims to find out how they have affected different dimensions of commitment. This addresses a gap in the internationalisation literature through explaining how a specific policy-driven shock alters both behavioural and attitudinal commitment. In this literature stream, commitment is typically treated as resource allocation with the Uppsala model assuming a stable environment. This research however examines the process in an increasingly unstable environment. Through an abductive approach and qualitative research design, we have conducted semistructured interviews with seven Swedish SMEs (primarily export firms and one service firm) and one industry expert. The collected data was analysed by using the Gioia methodology which led to a data structure of first-order codes, which were abstracted to second-order themes and then aggregate dimensions. Our findings provide a total of six propositions. Firstly, we find that the tariffs triggered short-term increases in behavioural commitment with the goal of maintaining operations rather than improving competitive position or presence. Second, we find that the US market size and/or the revenue derived from the market can motivate SMEs to maintain their market position even after imposition of tariffs and remaining uncertain circumstances. Third, our findings suggest that service and exporting firms can feel the effects of tariff measures through direct and indirect effects, which causes a reconfiguration in long-term resource allocation. Fourth, we propose that firms who experience high customer uncertainty after tariff imposition are more likely to decrease their instrumental commitment to the foreign market which was exposed to the shock. Fifth, we suggest that such a decrease in instrumental commitment is limited by the economic opportunity of the foreign market where the shock occurs. We lastly propose that firms with more market experience tend to develop negative feeling towards said market when they are being affected by a coinciding shock there. This, however, is moderated by the strength of their commitment towards relationships with local partners. This thesis contributes to exogenous shock and internationalisation literature by explaining how several dimensions of commitment are affected when learning about a foreign market increases uncertainty rather than reducing it. Additionally, it explains how SMEs in an advanced economy respond to a specific policy-driven shock.