Dazi, off to the first round. Tomorrow, Tuesday 1 May, with the end of the suspension granted to Europe, the new tariffs on steel and aluminum imports (25% and 10%) will in all likelihood also take effect in the Old Continent wanted by President Donald Trump and already imposed on China: a last attempt at mediation by Brussels, after the ultimatum launched in Washington by Angela Merkel, Emmanuel Macron and Theresa May through a joint statement, will take place but shouldn't produce effects. In fact, the US president seems intent on going straight: the country's trade deficit, one of the most sensitive issues for the current administration, has never been as heavy as it has been in recent months, with China which - precisely in view of the duties - has exported products to the States in the first quarter as it had never done before.
What do European countries risk from this new trade tariff? Italy does not produce aluminum (waiting for relaunch of the former Alcoa factory in Sardinia), while as far as steel is concerned, it is not among the very first European exporters to the USA (it is only the fifth): Germany is at the greatest risk of all in this sense, which diverts almost a million tons of finished products overseas in steel, with the Netherlands in second place with 632 tonnes. In any case, Italy exports more than a country like France, and in any case another danger is the indirect risks: that is, that the companies of the countries most affected by the duties will move exports towards destinations that have remained accessible, thus doing in some competition also to Italian companies.
Another indirect consequence, no less worrying: the European steel companies, which inevitably they will export less to the US and therefore perhaps less in absolute terms, they will cut the intermediate goods that they often and willingly buy from Italian suppliers. And the case wants it to be precisely the German steel industry, the most exposed to the North American market, the first to buy intermediate goods made in Italy. Nor can we exclude the risk of further duties, in a hypothetical spiral of retaliation and counter-retaliation: the made in Italy exports all over the States, according to Unimpresa data, goods for 37 billion euros, with industrial machinery in the lead but also cars (perhaps Trump's next protectionist target), the ship-train-aircraft sector and the agri-food sector.
Perhaps it is premature to raise the fear of a new possible recession, but certainly in a country, like Italy, with a rather weak economic recovery (and certainly among the weakest in the euro area) and moreover in a political climate still somewhat uncertain, the eventual escalation of the trade war triggered by Trump with this first tranche of duties, could cause more than one concern in the future. It is no coincidence that the Def recently approved by the Gentiloni government forecasts a loss of GDP, compared to the baseline scenario, of 0,3% in 2018 and 0,7% in 2019 precisely in the event of the approval of the new US-Europe duties.
