Imposed US Tariffs Cause Significant Burden on Italy, Spain, Greece, and Ireland's Imported Goods, with a Rate of 30%
Italy, a country heavily reliant on exports, is bracing for potential financial turmoil as U.S. President Donald Trump has threatened to impose 30% tariffs on European imports starting from August.
The majority of the affected exports (99%) would be manufactured goods, with the mechanical industry being particularly exposed. This "implicit tariff" has already resulted in a cumulative loss of up to 21% for Italian exporters compared to the pre-Trump period.
Italy exported €76.34 billion worth of goods to the U.S. in 2024, accounting for around 10% of Italy’s total exports. Key Italian export sectors to the U.S. include beverages, automobiles, transport equipment, chemicals, and machinery. A 30% tariff would raise costs substantially for these exports, thereby reducing competitiveness and potentially decreasing export volumes.
If tariffs were to increase further, the impact would be even greater. The regions most affected would be those with the highest manufacturing value added: Lombardy, Emilia-Romagna, and Tuscany. Economy Minister Giancarlo Giorgetti stresses the importance of reaching a reasonable compromise on tariffs and negotiating without giving up.
The depreciation of the dollar against the euro (-13% since the start of Trump's second term) has made European exports even more expensive in the U.S. market. This, coupled with the average tariffs on imports to the U.S. rising from 2.3% to 8.8% since April, has widened the gap for many Italian companies selling in the U.S., making it approximately 23% more expensive compared to 2023, resulting in approximately €20 billion less in total exports to the U.S.
The trade balance in goods for Italy has increased significantly, reaching 55 billion euros in 2024, from 34 billion euros, primarily due to a reduction in the deficit in extractive industry products. However, this progress could be undone if tariffs were to escalate.
Notably, an EU-U.S. trade deal recently set a 15% tariff ceiling on most EU exports to the U.S., which is half of the previously threatened 30% tariff. Thus, the 30% tariff scenario represents a worst-case escalation likely to cause substantial economic harm to Italy’s exports and employment.
If tariffs were to reach 30%, Italy could face financial damages totaling around €300 million just in additional tariff costs, with wider impacts reaching up to €1.3 billion particularly in southern Italy. This would significantly strain Italy’s export sectors and economic growth. More than 6,000 small and micro Italian companies are directly exposed to these risks.
The tariff uncertainty has put over 6,000 businesses with over 140,000 employees at high potential risk, with numerous small-sized businesses and domestic governance being among them. If tariffs were to rise to 30%, Italy could potentially lose up to €38 billion in exports to the U.S., out of current exports of €65 billion.
Negotiations between the U.S. and EU are intense, with the EU considering its own tariffs. Economy Minister Giancarlo Giorgetti states that the 10% threshold is reasonable and going much further would be unsustainable. The EU, like Italy, stands to lose significantly from such tariffs, and both parties are working towards a resolution that minimises harm to their economies.
The international industry of machinery could face a substantial increase in costs due to the 30% tariffs, threatening Italy's competitiveness in the U.S. finance market and potentially decreasing business volumes. The escalation of tariffs might result in significant financial damages for Italy, amounting to around €38 billion in potential export losses.
