The next one will be Europe, Italy included. There tariff bomb of Trump, which has already hit Canada, Mexico and China also triggering concerns for the growth of economies, is expected to arrive soon here too. The first estimates speak of increases of 4 to 10 billion for Italy, even if some particularly innovative niches might not be targeted. In the meantime, some Italian companies have played in advance.
European countermoves to the threat of tariffs
European products will be hit by US tariffs “very soon,” Trump told reporters. He explained that “they are really taking advantage of us, we have a $300 billion deficit. They are not taking our cars or our agricultural products, almost nothing and we are all taking millions of cars, enormous amounts of agricultural products.” On timing, Trump explained: “I don’t have a timetable but it will come very soon.”
Meanwhile, the European Union is preparing the countermoves. According to Corriere della Sera In the last few hours, a negotiating channel has been opened with the White House from Ursula von der Leyen's offices: Brussels is trying to offer packages of increased purchases of liquid gas e increases in military spending to escape the duties. And that's not all. Among the possible responses are those to hit agri-food, whiskey and bourbon imports, Harley Davidsons, SUVs and pick-ups. Europe could also make it harder for tech giants like Microsoft and Tesla to access public contracts. The French Industry Minister, Marc Ferraci, is calling for an "aggressive reaction", which must "have an impact on the American economy to constitute a credible threat. We must stop being naive".
Italy: the sectors most at risk are mechanics, fashion, agri-food and pharmaceuticals
Prime Minister Giorgia Meloni also said it: “Italy will be hit” despite Trump’s declarations of “sympathy” towards him. In the corridors of Palazzo Chigi, there are hypotheses of Trump’s axe on French champagne, but not for example on prosecco or Franciacorta. But in general, there is no lack of concern for Italian companies for the backlash, which could be significant, on export and by extension also on the National GDP.
Trump would like to straighten out US trade relations with the rest of the world. The American trade balance with us is also structurally in deficit, while the Italian one, based on the latest available data, those of 2023, has reached 42 billion in surplus. In the face of 67,3 billion euros of Italian exports, a figure that makes the US the second recipient of our production (after Germany and before France), there are in fact just 25,2 billion in imports.
Just this morning the January data was released for the Italian manufacturing sector who registered a contraction for the tenth consecutive month, maintaining a similar pace to that of December, in a context of continued decline in production and new orders. The Hcob Global Purchasing Managers' Index for manufacturing reached 46,3, with a slight increase from 46,2 the previous month, but well below the threshold of 50, which indicates growth. Jonas Feldhusen, economist at Hcob, underlined the lack of positive signals, highlighting the collapse of order books, both domestic and foreign.
Confartigianato assumes that, with a 10% increase in tariffs, the exports could fall by 4,3%. If duties were to increase by 20%, the drop in exports could even exceed 16%. “The United States are the first market in the world for 43 Italian products, including some high-tech productions such as the machinery and products with a strong artisan vocation such as the jewelry store and goldsmithing, eyewear, home furniture, chairs and sofas, cut and worked stones, sporting goods, artistic glass and ceramics, cutlery and flatware and musical instruments” says Confartigianato. In total, 44 thousand Italian companies could be penalized.
According to a Promethea the new customs sanctions could cost Italy from a minimum of 4 to a maximum of 7 billion dollars more per year, from 6 to 9 billion counting the duties applied already in 2023 to Made in Italy. Two scenarios which the Bologna research centre hypothesizes. The first provides for a partial increase of 10 points, that is, targeted on products that are already subject to duties, in total around 3.000 references, and in this case the estimate for our country is of a additional cost of over 4 billion essentially at the expense of the fashion system which would come close to a billion and a half dollars in additional costs, followed by mechanics which would reach a billion, from agri-food and the cars and motorcycles.
Il second scenario simulates instead a general tariff increase of 10 points of duties with an additional cost that would exceed 7 billion. In this second case, mechanics would pay the highest costs, arriving just under the 2 billion mark, then fashion, agri-food, intermediate products, pharmaceuticals and cars. Electronics and electrical engineering they would see the burden practically double, reaching around 400 million, furniture and chemicals for consumption it would be around 150 million per sector, but starting practically from zero and even this would be quite a bloodbath. "The new protectionism" say the analysts of Prometeia Claudio Colacurcio and Carmela Di Terlizzi who drafted the study "would in this hypothesis also affect medium and high technology intensity goods, as well as in pharmaceutica, which are today less exposed to the issue of tariffs because they are functional to domestic production".
Compared to other major European countries, only Germany, which is currently the leading European exporter to the US, would suffer a greater impact than ours with an estimated burden of 7,5/15,3 billion dollars depending on the scenarios. France and Spain would instead be required to bear a lower burden than ours, respectively equal to 2/5,5 billion and 1,2/2,3 billion dollars.
“Companies would be forced to choose whether to take on the tariff increase to maintain their competitive positioning or let it worsen due to higher final prices resulting from the duties” summarize the researchers at Prometeia, prophesying dark times for companies that live off exports.
High specialization could save us
According to a report by Fucino Bank However, beyond the immediate impact of the duties, "alongside typical Made in Italy products such as food products and clothing, there are categories with an even greater weight such as machinery, means of transport and pharmaceutical products which constitute the true pillars of Italian industry and exports". These, says the report, constitute "market niches difficult to dispute and largely highly sophisticated productions, and therefore with a high degree of specialization, and therefore it is presumable that in the short to medium term the USA will not be able to replace Italian supplies of these product categories". In fact, these are all high value-added productions that not only require huge investments but also long lead times.
Companies that play ahead
In recent weeks, some companies have been playing it safe. “We see companies bringing forward their imports to the U.S.,” said Patrick Lepperhoff, managing director of Cologne-based supply chain consultancy Inverto. “They have worked out scenarios based on how much they might be hit by tariffs and have decided quite broadly to import volumes that will be covered for a certain period of time.” Carmakers such as General Motors and Mercedes, French cognac producers and Italian producers of parmesan and sparkling wine all ramped up deliveries to the U.S. Meanwhile, commodity buyers stepped up purchases of steel, aluminum, and soybeans. Overall, U.S. imports of 20-foot containers rose in November and December, reaching their highest level since 2021.
